Use the following graph, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product, to answer the next question.
Sd + Q is the product supply curve after an import quota is imposed. A quota of y?w will result in an increase of domestic producer surplus equal to area(s)
A. E + F + K.
B. E.
C. E + F + G + H + J.
D. K.
Answer: B
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An increase in the U.S. interest rate relative to other countries will lead to ________ in the supply of dollars and a ________ in the exchange rate
A) an increase; fall B) a decrease; fall C) an increase; rise D) a decrease; rise E) no change; rise
Everything else held constant, if a central bank makes an unsterilized ________ of foreign assets, then the domestic money supply will ________ and the domestic currency will depreciate
A) purchase; increase B) purchase; decrease C) sale; increase D) sale; decrease
England can benefit from trade
a. only with nations that can produce goods England cannot produce. b. only with less developed nations. c. only with nations outside of Europe. d. with any nation.
"If all economists were laid end to end, they would not reach a conclusion.". Who made this whimsical observation?
a. Harry Truman b. George Bernard Shaw c. John Maynard Keynes d. Ronald Reagan