What is the main difference between a customs union and a free trade area?
a. There are no restrictions on the movement of labor and capital among customs union member countries, whereas labor and capital cannot move freely among free-trade member countries.
b. Customs union member countries use identical tariffs, whereas free-trade area member countries have different tariff structures.
c. There is free trade among customs union member countries but not among free-trade area member countries.
d. Customs union member countries have adopted a common currency, whereas free-trade member countries use their separate national currencies
Ans: b. Customs union member countries use identical tariffs, whereas free-trade area member countries have different tariff structures.
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For the past several decades, union membership in the United States has been declining. What has been happening in the rest of the world?
A) Union membership has been increasing in almost every other country. B) In almost every other nation, union membership has held constant. C) In most cases, union membership in other nations has also been falling. D) We do not know because other nations do not keep these statistics.
Other things the same, an increase in the U.S. real exchange rate makes U.S. goods more expensive relative to foreign goods
a. True b. False Indicate whether the statement is true or false
If the price index last year was 100 and today it is 104, what is the inflation rate over this period?
(a) -4%; (b) 1.4%; (c) 4%; (d) 40%.
If the economy is in equilibrium, it must be
A. on the 45° line. B. on the 60° line. C. below the 45° line. D. below the 60° line.