Analysts have suggested that the cost of bras is related to trade restrictions on textile imports. What does the price of bras have to do with tariffs and quotas?
A. Trade restrictions in the form of tariffs keep prices of bras high, but replacing them with quotas will result in lower prices.
B. Trade restrictions do not influence the price of bras; the price is determined by domestic technology and the overall inflation rate.
C. Trade restrictions keep the prices of bras high, and ending them will result in lower prices.
D. Trade restrictions protect consumers by keeping the price of bras low.
Answer: C
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Homer and Teddy are stranded on a desert island. To feed themselves each day they can either catch fish or pick fruit. In a day, Teddy could pick 60 pieces of fruit or catch 20 fish. Homer could pick 100 pieces of fruit or catch 150 fish
Which of the following is CORRECT? A) Homer has a comparative advantage in catching fish and Teddy has a comparative advantage in picking fruit. B) Homer has a comparative advantage in picking fruit and Teddy has a comparative advantage in catching fish. C) Homer has a comparative advantage in both catching fish and picking fruit. D) Teddy has a comparative advantage in both catching fish and picking fruit.
A store is choosing between advertising a credit card fee or a discount for paying cash to its customers. More customers are likely to pay cash if the store owner advertises:
A. either one; since it's the same outcome, people won't care one way or another. B. neither one; since people are not likely to pay cash more regardless of how it's advertised. C. the discount for paying cash. D. the credit card fee.
The real exchange rate generally has ________ relationship with aggregate expenditure.
A. a negative B. no C. a positive D. a constant
Which of the following is a positive statement?
A. The unemployment rate should never be above 5.8 percent. B. The unemployment rate should be below 5.8 percent. C. An unemployment rate of 5.8 percent is too high. D. The unemployment rate is 5.8 percent.