A country produces two goods, soda and chips. It currently exports soda and imports chips. If it were to impose a tariff on chips,
a. both imports of chips and exports of sodas would rise.
b. imports of chips would rise, but exports of sodas would fall.
c. imports of chips would fall, but exports of sodas would rise.
d. both imports of chips and exports of sodas would fall.
d
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Changes in consumption and investment spending due to changes in the real interest rate alter:
A. money demand. B. autonomous expenditures. C. induced expenditures. D. the money supply.
The major theme that we emphasized with regard to the measurement of income differences/inequality as well as contributors and remedies for these differences is that
A) the U.S. has contributed little to income assistance B) it's a complex topic with many underlying questions and issues C) private solutions to low income are relatively simple and effective, unlike public solutions D) there are no chronically low income households in the U.S.
Other things being equal, an increase in the supply of money
A) reduces the amount of money balances. B) reduces aggregate demand. C) generates significant changes in relative prices. D) increases the price level.
There is an old saying that "The proof of the pudding is in the eating," which means that by definition good decisions work out well and poor decisions work out badly. This question asks you to consider this the wisdom of this saying
a. Your friends live in a city where it often rains in May. Nonetheless, they plan a May outdoor wedding and have no backup plan if it does rain. The weather turns out to be lovely on their wedding day. Do you think your friends were being rational when they made their wedding plans? Explain. b. You usually have to see a doctor several times each year. You decided to buy health insurance at the start of last year. It turns out you were never sick last year and never had to go the doctor. Do you think you were being rational when you decided to buy health insurance? Explain. c. Given your answers to the first two parts of this question, do you agree or disagree that "The proof of the pudding is in the eating?" Explain.