This graph demonstrates the domestic demand and supply for a good, as well as a tariff and the world price for that good.
According to the graph shown, if the economy is operating in autarky and decides to open trade with a tariff, the impact on domestic demand is they will:
A. decrease consumption from 1500 to 815.
B. increase consumption from 815 to 1150.
C. decrease consumption from 1500 to 1150.
D. increase consumption from 815 to 1500.
Answer: B
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Returns to scale is a concept that operates
A) only in the short run. B) only in the long run. C) in both the long run and the short run. D) in either the long run or the short run, but never both.
After the Great Depression of the 1930s and particularly since World War II until the 1970s, the ideas of the __________ school became conventional wisdom
a. classical b. Keynesian c. monetarism d. supply-side e. rational expectations
Imagine that the U.S. economy is in equilibrium at full employment without inflation where national income is at $6,700 billion. The MPC = 0.8 . If massive flooding along the Mississippi River leads Congress to approve a spending package of $10 billion to aid flood victims, the government must also take which of the following actions to keep the economy in equilibrium at full employment without
inflation? a. increase taxes by $10 billion b. decrease taxes by $10 billion c. increase taxes by more than $10 billion d. decrease taxes by more than $10 billion e. increase taxes by less than $10 billion
A unit of account is
A) a bank account. B) a savings account. C) a common measurement in which values are expressed. D) the same as a medium of exchange. E) none of the above