Suppose that in the absence of trade, the U.S. price for bicycles was higher than the world price for bicycles. Would allowing international trade, mean that the U.S. would import or export bicycles? Who in the U.S. would benefit and who would lose with a free trade policy, and would the gains be greater than the losses?
The U.S. would import bicycles, as consumers demanded more bicycles at the lower world price. The U.S. price would fall to meet the world price, and the U.S. consumers would gain while U.S. producers would lose. The gains to consumers would however, outweigh the losses to producers.
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Buyers scrambled to secure stocks of Australian wool following a forecast of an 11 percent decline in wool production. What happens in the Australian wool market as a result of this announcement?
A) The quantity of Australian wool demanded increases in anticipation of higher prices in the future. B) The demand curve for Australian wool shifts to the left in anticipation of higher prices in the future. C) The quantity of Australian wool demanded decreases in anticipation of lower quantities in the future. D) The demand curve for Australian wool shifts to the right in anticipation of higher prices in the future.
On which of the following does the neoclassical counter-revolution school most blame underdevelopment?
a. misguided government policies b. relatively rigid cultural traditions c. the legacy of colonialism d. unfair trade practices on the part of developed countries
Which of the following categories account for the smallest fraction of unemployed workers?
a. Job leavers b. Job losers c. Reentrants d. New entrants
The quantity of reserves held by a bank in addition to the legally required amounts is known as
a. actual reserves b. excess reserves c. the legal reserve requirement d. the potential money multiplier e. the monetary base