A small country is considering imposing a tariff on imported wine at the rate of $5 per bottle. Economists have estimated the following based on this tariff amount: World price of wine (free trade):$20 per bottleDomestic production (free trade):500,000 bottlesDomestic production (after tariff):600,000 bottlesDomestic consumption (free trade):750,000 bottlesDomestic consumption (after tariff):650,000 bottles The imposition of the tariff on wine will cause the country's economic well-being to ________ by about
A. fall; $0.75 million.
B. rise; $0.75 million.
C. fall; $100,000.
D. fall; $0.5 million.
Answer: D
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If, at the current interest rate, the quantity of loanable funds supplied is less than the quantity of loanable funds demanded, then
A) the supply of loanable funds curve shifts leftward and the real interest rate rises. B) the real interest rate falls. C) the supply of loanable funds curve shifts leftward and the real interest rate falls. D) the real interest rate rises. E) the supply of loanable funds curve shifts rightward and the real interest rate rises.
Specific tariffs are collected as
A) fixed amounts of money per unit traded. B) a percentage of the price of the product. C) a percentage of the quantity of imports. D) All of the above.
Changes in the growth rate of the velocity of money can't permanently shift the AD curve because:
A. in the long run, the inflation rate is determined by the money supply growth rate. B. in the long run, the inflation rate is determined by the growth rate of the velocity of money. C. in the long run, the inflation rate will be equal to the Solow inflation rate. D. changes in the growth rate of the velocity of money shift the SRAS curve, not the AD curve.
Open market operations are
A. the Federal Reserve's purchase and sale of existing U.S. government securities. B. the procedures of applying for loans at commercial banks. C. the procedures for approving loans at commercial banks. D. steps a bank must complete before it can invest in stocks on the open market.