The U.S. government imposes import quotas on many agricultural products, especially products that receive price supports. Offer an economic explanation for this
What will be an ideal response?
If the price supports generate a price in the United States for a product that is above the price in other countries, producers in other countries would increase production with the intention of selling the units in the United States. But, with price supports, the government must purchase all extra units to maintain the price. With imports from abroad, this would get very expensive. Hence, imports are limited through quotas.
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Economic studies have shown that countries that have high inflation rates have lower rates of economic growth than do countries with low inflation rates. Explain what underlies this relationship between inflation and economic growth
What will be an ideal response?
Which of the following statements is true?
a. The four phases of the business cycle, in order, are: peak, recovery, trough, recession. b. When unemployment is rising then real GDP is rising. c. The economic problem typically associated with a recovery is rising unemployment. d. Full employment exists in an economy when the unemployment rate equals the sum of frictional, and structural unemployment rates.
Offering employees an efficiency wage may: a. reduce turnover
b. attract the most productive workers. c. lead to a reduction in training costs. d. result in any of the above.
A major advantage of the corporation is
a. limited taxes. b. preferential treatment by state governments. c. limited liability of individual owners. d. limited numbers of owners and ease of decision making.