Refer to the information provided in Figure 33.4 below to answer the question(s) that follow.
Figure 33.4Refer to Figure 33.4. The domestic price of a leather wallet is $20. With free trade the price of a leather wallet is $10 and after a tariff is imposed the price is $15. If there is free trade, this country will ________ 200 leather wallets.
A. export
B. import
C. sell
D. buy
Answer: B
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An example of a commitment device for Jane, who says she really wants to save more would be:
A. an agreement that she give any new clothes, jewelry, or makeup purchases to her best friend, and Jane is not allowed to borrow them. B. a commitment to only buy things on sale. C. a decision to cook her own food and not order take-out or delivery food unless she is too busy. D. buying a piggy bank to store savings.
All of the following are tools of fiscal policy except one. Which is the exception?
a. Taxes b. Transfer payments c. Interest rates d. Government purchases of goods e. Government purchases of services
If Jenna buys a CD at a price of $10, she gets a consumer surplus of $20 . This means she
a. does not have enough money to buy the CD b. will not buy the CD since marginal utility is not high enough c. was willing to pay as much as $30 for the CD d. was willing to pay as much as $20 for the CD e. will have $30 left over after she buys the CD
An increase in the money supply that leads to an increase in expected inflation, which in turn leads to an increase in the interest rate, is best described as the
A) liquidity effect. B) income effect. C) expectations effect. D) adaptive expectations theory.