The demand for cars in a certain country is given by: D = 20,000 - P, where P is the price of a car. Supply by domestic car producers is: S = 5,000 + 0.5P. If this economy opens to trade while the world price of a car is $6,000, and the government imposes a quota allowing 3000 cars to be imported, then the winners are ________.
A. domestic consumers
B. domestic producers and the government
C. domestic consumers and import permit holders
D. domestic producers and import permit holders
Answer: D
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A) quantity of money demanded decreases. B) demand for money decreases. C) demand for money increases. D) quantity of money demanded increases.
If total spending is greater than the value of output, firms will
a. cut prices. b. decrease production levels. c. tend to raise prices. d. see inventories rise.
Explain how a "conservative" and a "liberal" might differ in the types of policies they advocate to counteract a recessionary gap
GDP per capita is:
A. negatively correlated with quality of life. B. highly correlated with quality of life. C. loosely correlated with quality of life. D. perfectly correlated with quality of life.