The figure below shows the domestic demand (Dd) and domestic supply (Sd) curves of mopeds in a country before an import quota is imposed by the government. After the imposition of the quota, the maximum import quantity is QQ.
If the government auctions the quota licenses, how much will it collect as revenue?
A. $76.5 million
B. $45 million
C. $72 million
D. $31.5 million
Answer: A
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A) expansionary; stagflation B) contractionary; stagflation C) expansionary; recession D) contractionary; recession
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The wealth effect is another term for the
A) the interest rate effect. B) the real-balance effect. C) substitution effect. D) the indirect effect.
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