In 1930, the U.S. government attempted to help domestic firms that were harmed by the Great Depression by passing the Smoot-Hawley Tariff. In response to this tariff, other countries ________ and international trade ________
A) lowered their tariffs; thrived
B) raised their tariffs; collapsed
C) doubled their tariffs; became unrestricted
D) eliminated tariffs; began to grow outside of the United States
B
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When a new good is introduced, consumers have more variety from which to choose, and this in turn increases the cost of maintaining the same level of economic well-being
a. True b. False Indicate whether the statement is true or false
When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Under an assumption of monetary neutrality, a change in the nominal money supply has
A. a more than proportionate effect on the price level. B. no effect on the price level. C. a proportionate effect on the price level. D. a less than proportionate effect on the price level.
China has a comparative advantage in textiles and an absolute advantage in both textiles and radios. Japan has a comparative advantage in radios. According to this scenario
A. China should export textiles and import radios. B. Japan should import both radios and textiles. C. China should export both radios and textiles. D. Japan should export textiles and import radios.