A real cost of tariffs and quotas that is difficult to measure is that they
A) encourage rent seeking.
B) shift income from consumers to producers.
C) limit the quantity of imports.
D) reduce wages.
E) cause deflation.
A
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Using the figure above, suppose with no trade Liz and Joe each produce at point A on their respective PPFs. Then, Liz suggests that they specialize and trade. She would produces only smoothies and Joe would produce only salads
Then she would sell 10 smoothies to Joe at a price of 2.5 salads per smoothie. In this scenario, A) Liz gains 10 smoothies and 5 salads, and Joe gains 5 smoothies. B) Liz gains 5 smoothies, and Joe gains 10 smoothies. C) Liz gains 10 smoothies, and Joe loses 5 smoothies. D) Liz gains 5 smoothies and 5 salads, and Joe loses 5 salads. E) Neither of the individuals gains from trade.
The interest rate target emphasized in recent Federal Open Market Committee press releases is the
A) discount rate. B) prime rate. C) federal funds rate. D) equilibrium rate.
Intermediate targeting the money supply is preferable if there is a(n)
a. increase in the severity of supply shocks. b. unstable money demand function. c. low interest elasticity of money demand. d. difficulty in the measurement of money demand. e. none of the above.
The Lorenz curve showing perfect income equality would be
A. I.
B. J.
C. K.
D. L.