The long-run trends of relative prices of primary products suggest that the countries that are dependent on the export of primary products are most likely to
A. slowly catch up with the average per capita income in the industrialized countries.
B. experience an increase in their growth rates.
C. be able to import more from abroad.
D. experience deterioration in their terms of trade.
Answer: D
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In the 1980s, Japan agreed to limit the quantity of automobiles it would export to the United States. Why did the Japanese government agree to this trade restriction?
A) The Japanese government wanted more automobiles to be available for export to countries other than the United States. B) The Japanese government feared that the alternative would be a tariff or quota on imports of Japanese automobiles imposed by the U.S. government. C) The Japanese government wanted to limit sales to the United States in order to make more automobiles available for Japanese consumers. D) Japanese automobile producers lobbied for the restrictions in order to increase the price of their exports to the United States.
Suppose a consumer is willing to pay a maximum of $45 for a brand of perfume whose price increases from $37 to $41 . What will be the impact of this price rise on the consumer surplus?
a. Consumer surplus will increase by $8. b. Consumer surplus will decline by $8. c. Consumer surplus will increase by $4. d. Consumer surplus will decline by $4.
The GDP deflator is designed to adjust nominal GDP for changes in
a. the level of transfer payments. b. the quality of goods over time. c. the costs of economic bads such as pollution and crime. d. the general level of prices over time.
If the executives of the U.S. silicon-chip industry lobby Congress for protection from imports on the grounds that several thousand workers would lose their jobs if there were a reduction in domestic silicon-chip production, they are using the:
A) environmental standards argument. B) infant industry argument. C) job protection argument. D) national security argument.