Refer to Figure 9-5. The increase in domestic producer surplus as a result of the tariff is equal to
A) $11.25 million. B) $18 million. C) $32.5 million. D) $45 million.
A
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An important difference between tariffs and quotas is that tariffs
A) raise the price of the good. B) generate tax revenue for the government. C) stimulate international trade. D) help domestic producers. E) are paid by foreign producers.
In the open-economy macroeconomic model, the demand for dollars shifts right if at any given exchange rate
a. foreign residents want to buy more U.S. goods and services. b. U.S. residents want to buy fewer foreign goods and services. c. Both A and B are correct. d. None of the above is correct.
If demand for a product increases, how is market equilibrium restored?
a. As the product’s price increases, the quantity supplied increases until a new equilibrium is gained. b. As the product’s price decreases, the quantity supplied increases until a new equilibrium is gained. c. As the product’s price increases, the quantity supplied decreases until a new equilibrium is gained. d. As the product’s price decreases, the quantity supplied decreases until a new equilibrium is gained.
If prices are inflexible, then a negative demand shock will lead to:
A. A short-run increase in real GDP B. A short-run decrease in real GDP C. A short-run decrease in prices D. No change in real GDP in the short run