A political failure of a trade embargo is most likely to occur if
A. the target country is a dictatorship and the dictatorship is jeopardized by retreating from the policy that provoked the embargo.
B. the embargo imposes more damage on the target country than on the country imposing the embargo.
C. the target country is a colony of the imposing country and the embargo adversely affects the imposing country.
D. the imposing country is a relatively smaller country than the target country in terms of trade volume.
Answer: A
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Refer to Figure 2-2. At Point A in the production possibilities graph shown above, the economy:
A. is not using its resources efficiently. B. is using its resources efficiently while producing clothing but no food. C. is using its resources efficiently while producing food but no clothing. D. is using its resources efficiently to produce both food and clothing.
According to the Romer model, tax incentives to support research and development will lead to ________
A) higher tax rates in the future B) an increase in the general level of prices C) a decrease in the general level of prices D) increased per capita income
If government spending in a country declines by $10 billion and, at the same time, taxes increase by an equal amount, what is the total effect in the economy?
a. Equilibrium real GDP increases b. Equilibrium real GDP increases by $20 billion c. Equilibrium real GDP is unchanged d. Equilibrium real GDP decreases by more than $10 billion and less than $20 billion e. Equilibrium real GDP decreases by more than $20 billion
If the Fed purchases government securities from the public, the
a. money supply will decrease. b. reserves of commercial banks will decrease. c. required reserves ratio will increase. d. monetary base will increase.