Suppose a government is considering imposing either a tariff or a quota on imported grain, and either policy will result in exactly 750 tons of grain being imported. How do these policies differ?
A. Domestic production will be higher with the quota than with the tariff.
B. The price of grain under the quota will be higher than the price under the tariff.
C. The quota will generate revenue for the firms that hold import licenses, while the tariff will generate revenue for the government.
D. The price of grain under the tariff will be higher than the price under the quota.
Answer: C
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You believe that the total amount of goods produced in the United States has generally increased over the years. In a time-series graph illustrating the total amount produced, you expect to find
A) an upward trend. B) no relationship between time and the amount of goods produced. C) an inverse relationship between time and the amount of goods produced. D) a linear relationship.
Refer to the above figure. If the aggregate demand curve shifts beyond AD5, which of the following would we NOT expect?
A) strong demand-pull inflation B) no increase in real Gross Domestic Product (GDP) C) strong and rapid increases in the price level D) increases in real net domestic product
Under a system of flexible exchange rates, an increase in demand for a nation's currency in the foreign exchange market will: a. cause the nation's currency to appreciate
b. make it more expensive for the nation to import goods. c. cause the nation's balance on current account to shift toward a deficit. d. make it less expensive for foreigners to buy the nation's goods.
The income that people earn in resource or factor markets is called:
a. disposable personal income. b. transfer payments. c. national income. d. personal income.