Explain how governments restrict international trade and who benefits as well as who loses from the restrictions
What will be an ideal response?
Governments use tariffs and nontariff barriers, such as import quotas, to restrict trade. Tariffs and import quotas both boost the domestic price of the protected good. Consumers in that country lose because of the higher price. The domestic suppliers, however, gain from the higher price. Tariffs are source of revenue for the government that imposes it on imported goods, so the domestic government gains from a tariff. An import quotas, on the other hand, do not create revenue for government so the government does not gain from an import quota.
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Real GDP in a small country is worth $8 billion. The population of the country is 200,000. What is per capita Real GDP?
A) $30,000 B) $40,000 C) $60,000 D) $300,000
On January 1, 2006, a consumer borrowed $10,000 for a term of one year at an interest rate of 12 percent. How much principal and interest will the consumer pay back on January 1, 2007?
A. $10,000 B. $1,200 C. $8,929 D. $11,200
Microeconomics involves decisions made by
A. governments and societies B. firms and households C. countries and International organizations D. governments and economies
When a firm issues new shares of stock
A. it lessens the relative value of its net worth. B. it does not add to its debt. C. it increases its debt load. D. it must buy back existing shares of stock in return.