“Protection” is designed to help
A. firms whose relative inefficiency does not permit successful competition with imports.
B. workers who have very high productivity, and cannot survive against low-paid foreign workers.
C. government that needs revenue from tariffs and quotas to cover government spending.
D. firms that are highly efficient and cannot survive against low-price foreign imports.
Answer: A
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Comment on the following statement: "I decided to buy a car from a dealer in a town 100 miles away because he was offering a price that was $100 lower than the dealer in my hometown. Therefore, I saved $100."
What will be an ideal response?
At macro equilibrium:
A. Exports equal imports. B. Money supply equals money demand. C. Population growth is stable. D. Aggregate demand equals aggregate supply.
Looking at the Consumer Price Index since the end of World War II, we have had periods of price stability
A. just following World War II (1945-1948) and 1991 to the present. B. from 1952 through 1965 and 1975 through 1982. C. from 1975 through 1982 and 1991 to the present. D. from 1952 through 1965 and 1991 to the present.
Are federal budget deficits related to trade deficits?
A. Yes. If U.S. consumers buy too many imported goods they don't have money to save and a budget deficit results. B. Yes, but only if the quality of U.S. goods and services is deteriorating. C. Yes. As deficit spending goes up, it is likely government borrowing will, too. Then foreign residents who lend funds to the U.S. government have less to spend on our goods, so U.S. exports will fall. D. No. The budget deficit is entirely a domestic matter while the trade deficit only affects U.S. citizens who travel abroad.