If the United States government were to impose a quota on wristwatches imported from Switzerland, then the
A. price of wristwatches in the United States would decrease and total quantity consumed (domestic and imported) would increase.
B. price of wristwatches in Switzerland would rise, and Switzerland would be hurt by the quota.
C. total quantity of wristwatches (domestic and imported) consumed would decline as prices rise.
D. price of wristwatches in the United States would remain the same, but the quantity consumed would fall as imports fall.
Answer: C
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A) is constant; decreases B) decreases; is constant C) increases; decreases D) decreases; increases E) decreases; decreases
If we measure the income elasticity of a good as ?1.8, this means this good is a(n):
a. luxury good. b. substitute good. c. complementary good. d. inferior good. e. good from the food group.
Which of the following is the most likely response to a decrease in the U.S. real interest rate?
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A. 4. B. 5. C. 10. D. 25.