The political attractiveness of tariffs, quotas, and other trade restrictions is primarily the result of
What will be an ideal response?
the special interest nature of trade restrictions.
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Absolute advantage is
A) the ability to produce a good or service at a higher opportunity cost than one's competitors. B) the ability to produce more of a good or service than competitors that have fewer resources. C) the ability to produce more of a good or service than competitors when using the same amount of resources. D) the ability to produce higher quality goods compared to one's competitors.
Determine whether each of the following is a positive or normative statement. (a) The Fed should lower interest rates to increase economic growth, because we're in a recession. (b) Higher government budget deficits cause higher interest rates
(c) The trade deficit should decline because of the fall in the value of the dollar. (d) Because of our high inflation rate, we must reduce the rate of money growth. (e) A generous unemployment insurance system is a primary cause of high unemployment in Europe. (f) Increased average labor productivity in a country should lead to faster growth. (g) Government budget deficits are too high in the United States and should be reduced.
In an economy with production function Y = 1.5 × , K = 343, and L = 512. If factor markets are in equilibrium, then the rental price of capital is (approximately) ________, and the real wage is (approximately) ________
A) 0.5; 0.8 B) 7; 8 C) 0.9; 1.35 D) 1.4; 0.4 E) 0.6; 0.9
An implementation lag is
A. the time it takes to see if that there has been a shock to the economy. B. the time it takes the Fed or Congress to change economic policy. C. the time it takes for a new economic policy to affect behavior in the economy. D. none of the above.