Economists generally support
a. trade restrictions.
b. government management of trade.
c. export subsidies.
d. free international trade.
d
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Explain the typical relationship between the interest rates paid on bonds and loans and the riskiness, liquidity, and term to maturity of the bonds and loans
What will be an ideal response?
Under adaptive expectations, the short-term effect of an unanticipated shift to a more expansionary macroeconomic policy will be a
a. temporary reduction in the unemployment rate. b. permanent reduction in the unemployment rate. c. temporary reduction in the inflation rate. d. permanent reduction in the inflation rate.
Which of the following is NOT a reason the Fed alters the rate of growth of the money supply?
A. to influence aggregate demand B. to influence the amount of investment C. to influence the amount of consumption D. to shift the demand for money curve
The relationship between real estate markets and interest rates is:
A. inverse; higher interest rates drive down real estate prices and vice versa. B. direct; high interest rates lead to high real estate values as people abandon other financial assets. C. complex; cuts in the short-term interest rate lead to increases in long-term rates and higher real estate prices. D. nonexistent.