Use the following graph, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product, to answer the next question.
With free trade, that is, assuming no tariff, the outputs produced by domestic and foreign producers respectively would be
A. w and y?w.
B. w and z?w.
C. x and z?x.
D. v and z?v.
Answer: D
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Prior to the Uruguay Round agreement, the GATT was criticized because
A) it had no mechanism for enforcing its rules. B) prominent segments of world trade, including trade in agriculture and services, were not covered by GATT rules. C) member countries could veto GATT rulings not in their interests. D) All of the above.
Which of the following does not represent a "labor market rigidity" to which critics refer when discussing unemployment in Europe?
A) generous unemployment insurance B) restrictive monetary and fiscal policies C) a high degree of employment protection D) relatively high minimum wages E) none of the above
A direct expenditure offset occurs when an increase in government spending
A. is followed by an increase in consumer spending B. results in a decrease in private spending. C. is followed by an increase in taxes. D. results in an increase in household saving for retirement.
In-kind transfers are
A. The transfer of goods and services rather than cash. B. A means to allow the poor to make financial transactions between private providers of their own choosing. C. Programs for job relocation and training of poor people who wish to work in other geographic areas. D. Paid to individuals in a form that gives them the maximum flexibility to buy what they need.