Once international trade occurs, a country with a comparative advantage in the production of a good will ________ production of the good and ________
A) decrease; import the good
B) increase; export the good
C) not change; import the good
D) increase; import the good
E) decrease; export the good
B
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The production side efficiency loss of a tariff is caused by
A) confusion about prices when a tariff is imposed. B) higher profits gained by foreign producers. C) the expansion of relative inefficient domestic production. D) the contraction of domestic consumption. E) the increase in government revenue.
If the government wishes to increase GDP by $1,200b, and the MPC is 0.8, it should:
A. increase its spending by $240b. B. decrease its spending by $240b. C. increase its spending by $960b. D. decrease its spending by $960b.
A tax cut shifts the aggregate demand curve the farthest if
a. the MPC is large and if the tax cut is permanent. b. the MPC is large and if the tax cut is temporary. c. the MPC is small and if the tax cut is permanent. d. the MPC is small and if the tax cut is temporary.
The lemons model predicts that:
A. if there are low-quality goods in the market, there will be fewer or no high-quality items. B. if there are high-quality goods in the market, there will be fewer or no low-quality items. C. the more low-quality goods there are in the market, the more high-quality goods there will be in the market. D. if buyers are pessimistic about the percentage of low-quality goods on the market, sellers of low-quality goods will be able to charge higher prices than if buyers had neutral beliefs.