What two simultaneous outcomes are implied by new trade theory?
What will be an ideal response?
a nation can increase the variety of goods available to consumers
a nation can lower the cost of the goods being offered to consumers
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The assumption that regulation relentlessly seeks out deadweight loss and seeks to eliminate it is called the
A) social interest theory of regulation. B) capture theory of regulation. C) Coase theory of regulation. D) socially optimal theory of regulation. E) predatory theory of regulation.
To exercise the law of comparative advantage, a nation
a. must produce some goods using fewer resources than its trading partner. b. does not have to produce any goods using fewer resources than its trading partner. c. must produce some goods on an equal footing with its trading partner. d. must show a lower absolute cost of production than its trading partner.
When the fed wants to end a recession, they will act to ___ interest rates and ____ the money supply
a. increase; increase b. increase; decrease c. decrease; decrease d. decrease; increase
The existing tax rates on income in the United States:
A. curtail spending slightly when incomes rise because people have to pay more in taxes when incomes are high. B. act as an automatic stabilizer. C. encourage spending slightly when incomes fall because people pay less in taxes when incomes are low. D. All of these are true.