One World View article titled "EU Farm Subsidies" reports, "… France, Germany, and Switzerland all shield their farmers from international competition while subsidizing their exports." Which of the following shifts for agricultural products in international markets shows the effect of export subsidies?
A. The demand curve shifts to the right.
B. The supply curve shifts to the left.
C. The demand curve shifts to the left.
D. The supply curve shifts to the right.
Answer: D
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In an economy where aggregate spending is given by Y = 5,500 + 0.6Y - 20,000r, the interest rate is currently 5 percent (0.05). If potential output equals 11,750, the central bank must ________ the interest rate to close the ________ gap.
A. raise; recessionary B. reduce; recessionary C. raise; expansionary D. reduce; expansionary
Which of the following statements is/are correct?
I. Depository institution managers undertake riskier actions than they otherwise would because of the existence of deposit insurance. II. Because of the existence of deposit insurance, depositors in savings and loans and other banks have little incentive to investigate the financial stability of these institutions. A) I only B) II only C) both I and II D) neither I nor II
A fixed exchange rate is:
a) set by the government. b) also called a floating exchange rate. c) determined in international currency exchange markets. d) set equal to the prime rate.
Using indifference curve analysis, you can identify the point at which a consumer maximizes utility where the slope of the:
A. indifference curve is equal to the slope of the budget constraint. B. indifference curve is greater than the slope of the budget constraint. C. indifference curve is -1. D. budget line is -1.