Evaluate the argument: “Restricting imports from other nations will save U.S. jobs.”
What will be an ideal response?
The argument is a flawed one for several reasons. First, imports may eliminate some U.S. jobs, but they create others in those sectors that import products. Import restrictions change the composition of employment, but they have little effect on the total amount of employment. Second, there is a fallacy of composition with the argument. Restricting imports may help the U.S., but they make other nations that trade with the U.S. poorer and thus the actions will eventually hurt U.S. exports. Third, other nations can retaliate by imposing restrictions on imports from the U.S., thus causing a trade war that hurts all nations. Fourth, in the long run a nation must import to export. Domestic dollars spent on imports become income for foreign nations that they in turn can spend on U.S. exports.
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In the Harrod-Domar model, if the savings rate is 20% and the incremental capital output ratio is five, abstracting from depreciation, what is the implied growth rate?
What will be an ideal response?
Who can create valuable output out of idle property?
(a) labor (b) entrepreneurs (c) tenants making rental improvements (d) all of the above
If the MPC = 0.75, MPS must be _______ and the income multiplier is _______
a. 0.25; 4 b. 0.25; 5 c. 0.75; 5 d. 1.50; 5 e. 4; 0.25
Whenever the economy is producing the maximum amount of goods given the level of technology and the amount of resources
A) the number of resources used should be decreased since society must protect its scarce resources. B) the concept of opportunity costs does not exist. C) more goods will be available than customers want to buy. D) the economy is producing efficiently.