If a U.S. citizen buys a car produced in Germany, this transaction will add to
a. U.S. aggregate demand.
b. U.S. aggregate supply.
c. German aggregate demand.
d. German imports.
c
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Trade diversion results in
A) an increase in the total amount of trade in the world. B) a decrease in the total amount of trade in the world. C) no change in the total amount of trade in the world. D) either an increase or decrease in the amount of trade in the world, depending on where trade takes place.
Two firms, Industrio and Capitalista, have access to five production processes, each of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the table below. Both firms currently use process A, and each emits 4 tons of smoke per day. The government is considering two plans to reduce pollution: requiring both firms to reduce pollution by 25 percent or auctioning pollution permits. Each permit would entitle the owner to emit one ton of smoke per day. Without a permit, no smoke can be emitted.ProcessABCDE(smoke/day)(4 tons/day)(3 tons/day)(2 tons/day)(1 tons/day)(0 tons/day)Cost to Industrio ($/day)$350$400$500$700$1,000Cost to Capitalista
($/day)$225$250$290$400$600 Suppose the government decides to auction 6 permits. The government conducts the auction by starting at a price of $1 and asking how many permits each firm wants to buy at that price. If the total is more than 6, it raises the price by $1 and asks again until the total quantity demanded falls to 6. Under this system, each permit will sell for ________ with Industrio buying ________ and Capitalista buying ________. A. $51; 4; 2 B. $31; 2; 4 C. $101; 3; 3 D. $41; 4; 2
The capture theory of regulation predicts that regulations bring ________ to producers and impose ________ on any individual consumer
A) small benefits; small costs B) small benefits; large costs C) large benefits; small costs D) large benefits; large costs E) large benefits; no costs
Refer to the Article Summary. All else equal, a depreciation of the Chinese yuan relative to a currency such as the U.S. dollar should ________ the current account balance in China and therefore ________ the financial account balance in China
A) increase; increase B) increase; decrease C) decrease; decrease D) decrease; increase