how do high tariffs and other restraints on international trade affect a nation's prosperity
What will be an ideal response?
they prevent the nation from fully realizing the potential gains from specialization, exchange, and competition
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Assume that in an effort to help consumers, the government decides to reduce the amount of taxes it imposes on sellers of gasoline, that is, sellers are required to pay the government a smaller fee for each gallon of gas they sell
In the market for gas, this would have the effect of causing an increase in the supply of gas and a decrease in equilibrium price. Indicate whether the statement is true or false
Traditional Keynesian economists believed that:
a. the aggregate supply curve is a vertical line at a fixed level of prices. b. an increase in aggregate demand would cause a change in the price level. c. the government should take an active role in the economy to restore equilibrium. d. changes in aggregate demand does not determine equilibrium real GDP. e. the private sector is not an important source for shifts in aggregate demand.
An elected official will:
a. tend to favor policies that wield benefits in the short run and impose costs in the long run b. tend to favor policies that impose costs in the short run and yield benefits in the long run c. both of the above d. neither of the above
Adam and Bob are identical twins who attended grammar school through high school together. Adam got a job after high school, and Bob got a job after graduating from college. Adam earns $36,000 a year, and Bob earns $69,000 a year. Select the best explanation for this wage difference
a. Adam has less human capital than Bob. b. Bob has less human capital than Adam. c. Adam has received a compensating differential d. Adam is a member of a union.