GATT is an example of a successful unilateral approach to achieving free trade
a. True
b. False
Indicate whether the statement is true or false
False
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When bank deposits increase from $1 million to $2 million, banks' required reserves increase from $100,000 to $200,000. The required reserve ratio is ________
A) 10.0 B) 0.10 C) 1.00 D) 0.25
A large country imposes capital controls that prohibit foreign borrowing and lending by domestic residents. The country is currently running a financial account deficit. The imposition of the capital controls will cause
A) net exports to increase. B) real domestic interest rates to rise. C) real world interest rates to fall. D) desired national saving to fall.
Compared to the fixed-price/fixed-wage model, in the Keynesian model with a flexible price but fixed wage, an increase in the money stock will cause output to rise by
a. less while the interest rate will fall by more. b. less and the interest rate to fall by less. c. more but the interest rate to fall by less. d. more and the interest rate to fall by more.
Assume that the world price of Commodity X is $9 per unit while its domestic price is $8, and the marginal cost of production is $6 per unit. If the government imposes a price ceiling of $7 on domestic output:
a. the import of Commodity X from the world market would stop. b. the world price of Commodity X would decline. c. a surplus of Commodity X would accumulate in the domestic market. d. a shortage of Commodity X would be observed in the domestic market.