Which of the following is true?
a. Specialization and trade leads to mutual gains for countries.
b. Protectionism (i.e., policies that limit trade in certain goods) promotes both economic prosperity and greater employment.
c. Countries that have a lot of resources, like the United States, are always hurt by trade.
d. Countries will have a higher standard of living when they produce as many goods as possible domestically.
A
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Trade war occurs when, after a tariff is imposed, other countries retaliate with their own tariff
Indicate whether the statement is true or false
According to Keynes, in order to get the economy out of a recession, the government should: a. follow an expansionary fiscal policy
b. encourage firms to export to other nations. c. follow an contractionary fiscal policy. d. follow a contractionary monetary policy. e. not interfere in the market and let the market system heal itself.
Exhibit 4-10 Supply and demand data for apricots Bushels demandedper month Price perbushel Bushels suppliedper month 50 $5 80 55 4 75 60 3 70 65 2 65 70 1 55 In Exhibit 4-10, assume that the government initially sets a price floor of $4 for apricots, and then removes the $4 price floor. What effect will this price change have?
A. The price of apricots will rise. B. The quantity of apricots demanded will fall. C. The quantity of apricots supplied will decline. D. Quantity supplied will continue to exceed quantity demanded.
An increase in national income could by caused by which of the following?
A) an increase in depreciation B) an increase in personal taxes C) a decrease in personal income D) an increase in gross domestic product