Answer the following statements true (T) or false (F)
1. Import tariffs benefit the consumers of the product involved.
2. If demand for a product is increasing, an import tariff is less restrictive than an import quota.
3. Export subsidies tend to hurt domestic consumers and benefit the foreign consumers.
4. A voluntary export restraint (VER) is similar to an import quota; except that the former benefits the foreign producers while the latter benefits the domestic producers.
5. Trade protection in most instances transfers wealth from consumers to domestic producers.
1. F
2. T
3. T
4. T
5. T
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
The elasticity of demand for Dell computers is probably
A) inelastic and smaller than the elasticity of demand for computers overall. B) elastic and smaller than the elasticity of demand for computers overall. C) inelastic but larger than the elasticity of demand for computers overall. D) elastic and larger than the elasticity of demand for computers overall.
Does the short-run Phillips curve have a positive or negative slope? Explain how this slope is derived
What will be an ideal response?
The nominal interest rate: a. varies directly with the rate of expected inflation in an economy
b. is the interest rate expressed in dollars of constant purchasing power. c. equals the difference between the real interest rate and the inflation rate. d. is the basis for decisions taken by the lenders and the borrowers in an economy. e. is the percentage increase in the average price level from one year to the next.