Considering only their direct effect on income, which of the following policies is least likely to reduce a country's trade deficit?
A. A decrease in government spending
B. An increase in taxes
C. A decrease in the money supply
D. A cut in taxes
Answer: D
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One way by which firms differentiate their products is to find a market niche
Indicate whether the statement is true or false
Assume a market that has an equilibrium price of $4. If the market price is set at $8, which of the following is true?
A. Some surplus is transferred from consumers to producers, but total surplus falls. B. All surplus is transferred from consumers to producers, and total surplus stays the same. C. Some surplus is transferred from producers to consumers, but total surplus falls. D. Some surplus is transferred from consumers to producers, causing total surplus to increase.
A microeconomic analysis shows that in a competitive economy in which labor is homogenous and mobile, the ratio of the prices of the products in equilibrium is inversely proportional to:
a. the ratio of the capital used in production. b. the ratio of the marginal products of labor. c. the geographical region of the country in which the factory is located. d. the strength of bargaining power of the workers.
Intraindustry trade tends to be more controversial than interindustry trade
Indicate whether the statement is true or false