A price level increase tends to reduce net exports, thereby reducing the amount of real goods and services purchased in the United States. Economists refer to this phenomenon as
A) the barrier effect. B) the Gross Domestic Product (GDP) effect.
C) the open-economy effect. D) the wealth effect.
C
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Refer to Figure 17-4. Which of the following is true at W0?
A) The substitution effect is larger than the income effect. B) The income effect and the substitution effect are equal. C) The income effect is larger than the substitution effect. D) The supply curve is positively sloped.
The DD schedule shows all combinations of which 2 variables so that the output market is in equilibrium?
A) imports and exports B) exports and the exchange rate C) foreign prices and the exchange rate D) output and the exchange rate E) output and exports
Since the U.S. is organized as a market economy, the government sector does not play any role in economic activity
a. True b. False Indicate whether the statement is true or false
What is the equilibrium price and quantity of CFC-11 before the excise tax?
Consider the following market for CFC-11, a known ozone-depleting substance: Demand: Q= 20 – 1.5P Supply: Q= 5+0.5P whereP is price per pound. Assume the governmental authority imposes a $5 per pound excise tax on CFC-11, which shifts the supply function to Q’ = 2.5 +0.5P.Use this information for any or all of the next three questions below. a. P = $8.75; Q = 5 c. P = $6.875; Q = 8.75 b. P = $7.5; Q = 8.75 d. none of the above