According to empirical observations, the cost of restricting international trade in the U.S. is much greater than the benefits generated from restriction. In the light of the above observation, which of the following statements is true?
a. Domestic producers end up earning lower profits than what they would earn without trade restrictions.
b. Consumers end up paying much more for the goods they buy in order to subsidize the relatively inefficient domestic producer.
c. U.S. GDP would be over $14 billion higher with import restrictions than without restrictions.
d. Protection of the U.S. textile and sugar industries means that all consumers pay a lower price for clothing and sugar.
e. Protection of the domestic industries enable the producers to charge lower prices for their products.
b
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Refer to the figure above. If a price control is imposed at $8, what is the gain in consumer surplus?
A) $5 B) $10 C) $15 D) $20
The FOMC ________
A) meets four times a year to decide on how to conduct open market operations that influence the money supply B) meets six times a year to decide on how to conduct open market operations that influence the money supply and interest rates C) meets eight times a year to decide on how to conduct open market operations that influence the money supply and interest rates D) meets twelve times a year to decide on how to conduct open market operations that influence interest rates E) none of the above
When there is an excess quantity of a product supplied, there will be
A) a tendency for price of the product to increase. B) a tendency for price of the product to fall. C) incentives for consumers to leave the market. D) upward pressure on the price of labor.
Which of the following addresses agency costs
a. spot checks of the quality of employee work b. hiring only from job fairs c. instituting longer work days d. reducing the number of holidays