A domestic monopoly producing a close substitute of an imported product would prefer to be protected by a quota than a tariff that results in the same amount of imports because
A. the deadweight loss will be smaller with a quota.
B. a quota allows the monopoly to charge a higher price.
C. unlike a tariff, a quota does not generate revenue for the government.
D. after the imposition of the tariff the price of the imported good declines in the domestic market.
Answer: B
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If output is increased in the long-run, average production costs in the presence of internal diseconomies of scale will ________, and in the presence of external diseconomies of scale, will ________
A) decrease; decrease B) increase; remain constant C) remain constant; increase D) decrease; remain constant E) increase; decrease
Unconventional monetary policy tools include all but:
A. forward guidance. B. reserve requirement. C. targeted asset purchases. D. quantitative easing.
The difference between a standard and an inverted yield curve is that when the yield curve is inverted, the longer-term bond pays a lower interest rate than a short-term bond.
Answer the following statement true (T) or false (F)
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point E to Point A, the opportunity cost of hybrid cars, measured in terms of motorcycles
A. increases. B. initially increases, then decreases. C. decreases. D. remains constant.