Refer to the figure above. If this were a voluntary restraint agreement, the welfare costs to the importing country would be
A) $14,000.
B) $18,000.
C) $38,000.
D) $60,000.
B
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According to Keynes, the speculative demand for money pertains to money held in anticipation of a(n)
a. increase in bond prices. b. decrease in bond prices. c. rise in interest rates. d. fall in interest rates. e. both b and c
A person has a comparative advantage in producing a good if:
a. that person can produce the good at a lower absolute cost than anyone else. b. that person can produce the good at a lower opportunity cost than anyone else. c. that person has a perfectly elastic demand curve for her good. d. that person spends less on advertizements. e. that person can produce the good at a higher opportunity cost than anyone else.
Scarcity means
a. unlimited wants and unlimited available resources. b. unlimited wants and limited available resources. c. limited wants and limited available resources. d. limited wants and unlimited available resources.
Suppose that the United States and the United Kingdom both use the gold standard. Their prices of gold are $35 = 1 ounce and £7 = 1 ounce, which yields an implied exchange rate of $5 = £1. Now suppose that the exchange rate temporarily rises to $5.50 = £1. What actions would you follow to take advantage of this temporary opportunity for arbitrage?
A) Sell gold for pounds in the United Kingdom, buy dollars with pounds in currency markets, and buy gold with dollars in the United States. B) Sell gold for dollars in the United States, buy pounds with dollars in currency markets, and buy gold with pounds in the United Kingdom. C) Sell gold for dollars in the United States, sell pounds for dollars in currency markets, and buy gold with dollars in the United Kingdom. D) Sell gold for dollars in the United Kingdom, buy pounds with dollars in currency markets, and buy gold with pounds in the United States.