Farm programs such as those of the United States and the European Union:
A. encourage the United States and the European Union to use tariffs and quotas to restrict
agricultural imports.
B. cause U.S. and EU farmers to produce less than domestic consumers want to purchase.
C. increase world market prices for agricultural products.
D. raise farm output in developing nations.
Answer: A
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In 2008, the Treasury and Federal Reserve took action to save large financial firms such as Bear Stearns and AIG from failing. Which of the following is one reason why these measures were taken?
A) The Fed and the Treasury wanted to allow Freddie Mac and Fannie Mae more time to buy the firms before they went bankrupt. B) The Emergency Economic Stabilization Act required the Fed and the Treasury to provide financial assistance to firms that participated in regular open market actions with the Fed. C) The bankruptcy of a large financial firm would force the firm to sell its holdings of securities, which could cause other firms that hold these securities to also fail. D) The failure of these firms would have forced the Fed to increase interest rates, which could have led to a severe recession.
What are private goods? Mention two important attributes of private goods
A country is using a beggar-thy-neighbor policy whenever:
A) it uses contractionary monetary policy to attract capital inflows from other countries. B) it devalues its currency to improve its macroeconomic position at the expense of its trading partners. C) it revalues its currency to improve its macroeconomic position and that of its trading partners. D) it cooperates with other countries in establishing its monetary policy.
The economies of North Korea and Cuba are:
A. Similar in that they are both basically command systems B. Similar in that they are both basically market systems C. Different in that North Korea has a command system while Cuba has a market system D. Different in that Cuba has a command system while North Korea has a market system