One way tariffs differ from quotas is that
A) tariffs produce revenues for the importing country's government.
B) quotas produce revenues for the exporting country's government.
C) tariffs produce no revenues but set limits on the imported items.
D) tariffs are applied only on raw materials.
Answer: A
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If the currency drain ratio increases, how can the Fed adjust the monetary base to offset the effect on the quantity of money?
What will be an ideal response?
If consumers are loyal to the products of an existing firm, this loyalty may
a. reduce the incentives for the firm to invest b. result in more responsive management and better quality products c. reduce the demand for imported goods d. serve as a barrier to new entry into the market e. force the firm to produce at higher costs
When a consumer is purchasing the best combination of two goods, X and Y, subject to a budget constraint, we say that the consumer is at an optimal choice point. A graph of an optimal choice point shows that it occurs
a. along the highest indifference curve. b. along the lowest budget constraint. c. where the indifference curve is tangent to the budget constraint. d. All of the above are correct.
Suppose aggregate demand shifts to the left and policymakers want to stabilize output. What can they do?
a. repeal an investment tax credit or increase the money supply b. repeal an investment tax credit or decrease the money supply c. institute an investment tax credit or increase the money supply d. institute an investment tax credit or decrease the money supply