Which of the following statements is true?
A. Free trade causes contraction of the export-oriented sector.
B. Free trade causes contraction in the import-competing sector.
C. All domestic producers benefit when a country engages in free trade.
D. Free trade restricts consumption choices of domestic consumers.
Answer: B
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Figure 4-4
In Figure 4-4, an increase in population will change demand from
A. D1to D2. B. D2to D1. C. D3to D2. D. D3to D1.
The short-run relationship between inflation and unemployment is often called as the Phillips curve.
Answer the following statement true (T) or false (F)
Other things the same, an increase in the price level induces less spending on a. household consumption and investment
b. household consumption, but not investment. c. investment, but not household consumption. d. neither investment nor household consumption.
Which of the following are justifications for running a budget deficit?
a. stabilizing the economy during a recession b. future generations will benefit from some current expenditures c. both a and b d. neither a nor b