In a closed economy
A) I = Y - C - G. B) I = Y + C - G. C) I = Y + C + G. D) I = Y - C + G.
A
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Which of the following statements is true?
A) The U. S. economy would gain from the elimination of its tariffs but not from the elimination of its quotas. B) The U.S. economy would gain from the elimination of tariffs and quotas even if other countries do not reduce their tariffs and quotas. C) Economic efficiency would be increased if the United States eliminated all of its trade restrictions, but only if all other countries eliminated their trade restrictions too. D) Eliminating its tariffs and quotas unilaterally would not benefit the United States because this would remove the leverage it would have to persuade other countries to eliminate their trade restrictions.
Which of the following is a primary implication of the accelerator theory of investment?
A) Net investment occurs when the desired and actual capital stocks are equal. B) In order for gross investment to remain constant, income must remain constant. C) Rising rather than high levels of output are necessary to maintain a high level of net investment. D) B and C are both correct.
If protective import-restricting tariff are imposed by a country, in the majority of cases that nation's consumers end up
A) paying a lower price and consuming more of the good than they otherwise would. B) paying a lower price and consuming less of the good than they otherwise would. C) paying a higher price and consuming less of the good than they otherwise would. D) paying a higher price and consuming more of the good than they otherwise would.
Negative externalities cause loss of welfare not transmitted by market factors.
A. True B. False C. Uncertain