The above figure shows the market for rice in Japan. S2 represents the domestic supply curve, and S1 represents the world supply curve. Currently 10 units are imported. The Consumption distortion loss is equal to
A) c+e.
B) c.
C) c+g+i.
D) a + c + d + e.
C
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Ignoring any supply-side effects, suppose the government is considering cutting taxes by $100 billion or increasing government expenditures on goods and services by $100 billion. Then
A) both policies would increase aggregate demand but the increase in government expenditure has a smaller effect. B) the tax cut would increase aggregate demand and the increase in government expenditure would decrease aggregate demand. C) the tax cut would decrease aggregate demand and the increase in government expenditure would increase aggregate demand. D) both policies would increase aggregate demand by the same amount. E) both policies would increase aggregate demand but the tax cut has a smaller effect.
Netflix introduced DVD rentals via US Mail whereby customers do not have to leave their home to rent movies. They also introduced the concept of no-late fees. Netflix has enjoyed strong profits over the last few years
However, what does economic theory tell us should happen to these profits in the long run and why?
If there is a basic surplus and a negative total deficit, then
A) interest cost > basic surplus. B) interest cost < basic surplus. C) interest cost > positive total deficit. D) interest cost < positive total deficit.
What accounted for much of policymakers' concern over U.S. current account deficits in the 1980s, 1990s, and 2000s?
A) The current account deficits were thought to be largely responsible for the federal budget deficit. B) Current account deficits lower U.S. interest rates, thereby leading to reduced domestic saving. C) Current account deficits require the United States to borrow funds from foreign savers. D) The United States had signed international agreements in which it had pledged not to run a current account deficit for more than three years in a row.