Higher protection raises the overall level of employment
Indicate whether the statement is true or false
FALSE
Explanation: Protection tends only to redistribute jobs.
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Figure 5-17
Which of the following statements about Figure 5-17 must be correct?
A. The consumer pays a higher dollar price per unit for good Y at A than at D. B. The consumer pays the same dollar price per unit for good Y at A and at B. C. The consumer pays a higher dollar price per unit for good X at D than at A. D. The consumer pays a higher dollar price per unit for good X at A than at C.
An increase in nominal income will result in:
a. a decrease in money market equilibrium. b. an excess demand for bonds. c. an increase in bond prices. d. an excess supply of money. e. a higher interest rate.
If the Consumer Price Index (CPI) increases from 100 to 200 and the nominal wage increases from $100 to $400, what is the change in the real wage in terms of the beginning year's dollars?
a. +$200 b. +$400 c. +$100 d. +$300 e. -$200
Which of the following statements regarding the cheap foreign labor argument is correct?
a. If there is an abrupt change in foreign competition that severely penalizes American workers, the U.S. government should immediately adopt protectionist measures. b. In the long run, labor will be cheap (wages are low) in those nations where labor is most productive. c. If workers in other countries are willing to supply their products with little compensation, this must ultimately raise the standard of living of the average American worker. d. American workers can never suffer from foreign competition since our monetary and fiscal policies always produce high employment at home.