A country that must inhibit imports should give preference to
A. quotas over tariffs because quotas are less likely to distort trade patterns between nations.
B. tariffs over quotas because, unlike quotas, tariffs offer no special benefits to inefficient exporters.
C. export subsidies over quotas or tariffs because export subsidies can protect a nation’s domestic producers.
D. an embargo wherever possible because an embargo can serve as a political weapon in addition to being a “trade stopper.”
Answer: B
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If credit card balances rise in the economy, then M1 will ________ and M2 will ________
A) decrease; increase B) not change; increase C) increase; decrease D) not change; not change E) increase; increase
Structures in the economy increase aggregate demand when the economy is in recession and decrease aggregate demand when the economy is inflationary are known as:
a. tax transfers. b. inventory investment. c. accelerators. d. depreciation. e. automatic stabilizers.
Pam is determined to lose 10 pounds and plans to adhere to a strict diet. But at the coffee break, she sees tray of glazed donuts and can't resist. She forgoes the plain bagel and devours a donut. Both the donut and bagel are priced at $0.50 . When her office mates tease her, she says matter-of-factly that
a. the MU/P of donuts is higher than that of the bagel, and that's that! b. the MU/P of bagels is higher than that of the donut, and that's that! c. the consumer surplus associated with bagels was higher than it was for donuts, making donuts more attractive d. when it comes to food, she's irrational e. the MU of losing 10 pounds is less than the MU of eating one donut.
Suppose there is a real depreciation of the dollar. Which of the following may have occurred?
A) foreign currency has become more expensive in dollars. B) foreign goods have become more expensive to Americans. C) the foreign price level has increased relative to the U.S. price level. D) all of the above E) none of the above