Which of the following groups are most likely to benefit when a country engages in free trade?
A. The manufacturers of exportable goods
B. All the domestic producers of the country
C. The producers in the import-competing industries
D. The workers employed in the import-competing industries
Answer: A
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Suppose the real money demand function is Md/P = 2400 + 0.2Y - 10,000 (r + ?e). Assume M = 5000, P = 2.0, and ?e = .03. If Y were to increase from 4000 to 5000, then the real interest rate would increase by how many percentage points?
A) 2 B) 4 C) 5 D) 7
Business cycle persistence refers to the property that
A) real GDP is rarely exactly at trend. B) booms and recessions last a long time. C) when real GDP is above trend, it tends to stay above trend, and when it is below trend, it tends to stay below trend. D) business cycles are persistently hard to predict.
In the data, which of the following is most volatile?
A) real GDP B) consumption of durables C) consumption of nondurables D) consumption of services
If a price ceiling of $8 were placed on the market in the graph shown, which area represents the surplus that is transferred from producers to consumers?
A. C + D + F + G
B. C + D
C. F + G
D. C