Which of the following statements is used to justify protectionism?
A) Free trade leads to higher prices for imported goods.
B) Free trade increases employment by protecting domestic firms.
C) A country should not rely on other countries for goods that are critical to its national defense.
D) Trade restrictions are not necessary to protect new firms since they can gain experience and become more productive without protection.
Answer: C
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"The aggregate demand multiplier results in the aggregate demand curve shifting by more than any given initial change in expenditure." Is the previous statement correct or incorrect?
What will be an ideal response?
All of the following are considered to be problems associated with the use of concentration ratios to measure market power except:
A) the market definitions used in their construction may be arbitrary. B) two different markets with the same concentration ratio may have very different distributions of market share among firms used to calculate the concentration ratio. C) consideration of exports and imports generally causes concentration ratios to be overstated. D) concentration ratios are often based on national statistics and may not reflect substantial concentration in a market at a more localized level.
Which of the following is NOT a normative standard for income distribution?
A) the productivity standard B) the egalitarian principle C) rewarding people according to merit D) All of the above are normative standards.
The change in aggregate expenditures resulting from a movement in the domestic price level, which in turn changes the price of domestic goods in relation to foreign goods, is known as the:
a. international trade effect. b. multilateral equilibrium condition. c. international exchange rate effect. d. magnified international pricing effect. e. international deficit effect.