Unplanned inventory investment equals zero when:
A. expected sales are greater than actual sales.
B. planned investment equals actual investment.
C. planned investment is less than actual investment.
D. planned investment is greater than actual investment.
Answer: B
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A difference between a quota and a tariff is that
A) a tariff generates a higher price than does a quota. B) a tariff generates a greater reduction in exports than does a quota. C) a quota increases profits of domestic producers more than does a tariff. D) the government collects revenue from a tariff but does not collect revenue from a quota.
The tendency of many economic variables to move together in a predictable way over the business cycle is called
A) recurrence. B) persistence. C) comovement. D) inflation.
Suppose that the world price of kiwi fruit ($10 per box) is below the domestic price ($12 per box). A tariff of $1 per box would:
a. cause foreign producers to be better off, because the price they charge is now higher by $1 per box. b. cause domestic producers to be worse off by $5 per box. c. make domestic consumers worse off as they would be paying $1 more than the domestic price. d. make domestic consumers pay $1 more than the free trade price, but still $1 less than the domestic price. e. cause domestic producers to be worse off by $10 per box.
Which of the following gives pollution-emitting firms an incentive to reduce the damage they do to the environment?
a. Negative externalities b. Positive externalities c. Commands and controls d. Pollution charges