The danger of using the national defense argument to protect domestic industries necessary to wage war is that
a. it has no validity on non-economic grounds.
b. it is unrelated to the United States' ability to wage war.
c. other nations will retaliate with tariffs against U.S. producers of war material.
d. industries with only the most peripheral relationship to defense are likely to invoke this argument on their behalf.
d
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Along a linear consumption function,
A) the average propensity to consume rises with income, but the marginal propensity to consume falls with an increase in income. B) the marginal propensity to consume rises with an increase in income. C) the average propensity to consume falls with an increase in income. D) both the average propensity to consume and the marginal propensity to consume rise with an increase in income.
The above figure shows the market for anti-freeze. The government imposes the sales tax shown in the figure on sellers. The sales tax on anti-freeze decreases the quantity of anti-freeze that automobile owners purchase by
A) 0 gallons. B) 1000 gallons. C) 2000 gallons. D) 3000 gallons.
A firm that decides to make a price cut assumes that marginal profit is negative.
Answer the following statement true (T) or false (F)
Under a system of flexible exchange rates, which of the following will most likely cause a nation's currency to appreciate on the foreign exchange market?
a. a decrease in domestic interest rates b. an increase in foreign interest rates c. domestic inflation of 10 percent while the nation's trading partners are experiencing stable prices d. stable domestic prices while the nation's trading partners are experiencing 10 percent inflation