Politically, one reason trade restrictions are common is that
a. the many beneficiaries of free trade each gain a small amount whereas the few losers, lose enough to lobby for restrictions.
b. the beneficiaries of free trade collectively gain a small amount whereas the few losers, collectively lose much more.
c. the few beneficiaries of free trade each gain a large amount and the many losers, lose enough to lobby for restrictions.
d. foreign corporations bribe politicians.
A
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Bobby moves along an indifference curve for shirts and pants by increasing consumption of shirts and decreasing consumption of pants. As Bobby has more and more pants, the number of shirts he is willing to trade for yet another pair of pants
A) decreases. B) increases. C) does not change. D) initially decreases and then increases.
As the price of foreign exchange decreases relative to the U.S. dollar,
a. U.S. products become cheaper for foreigners b. foreign goods become cheaper for Americans c. more foreign currency is required to purchase a U.S. dollar d. the U.S. demand curve for foreign exchange shifts to the right e. the supply curve of foreign exchange to U.S. markets decreases
In the classical model, government purchases or tax cuts are appropriate policies to raise GDP
a. True b. False
If two nations engage in trade, they will always share equally the gains achieved through specialization
Indicate whether the statement is true or false