If the own-price elasticity of demand equals -0.2, then the price flexibility of demand is equal to
A) -0.2. B) -5. C) -0.4. D) None of the above
Answer: B
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The proposal that trade agreements should include a system which monitors worker conditions and make the results available to consumers in the rich importing country
A) is consistent with the Invisible Hand paradigm. B) is consistent with the market failure approach. C) is consistent with the Ricardian theory of comparative advantage. D) is consistent with the scale economies approach to trade theory. E) is consistent with the principles laid out by the WTO.
Banks in need of reserves can borrow from the Fed or in the federal funds market
a. True b. False Indicate whether the statement is true or false
Situation 32-1 In the early 1980s, the U.S. automobile industry managed to influence the government to negotiate a voluntary export restraint agreement with Japan that was in effect from 1981 until 1985. The predictable result was an average increase in the price of Japanese cars by about $1,000 and of U.S. cars by about $370. Also, as a result of the import quotas, 26,000 new jobs were "created"
in the U.S. automobile industry. Refer to Situation 32-l. At the time the total yearly salary (including all the benefits) of the average auto worker was no more than $50,000 per year, and the cost per job saved was estimated at $160,000 per worker per year. We can conclude that A) import quotas are a cost-efficient way of saving jobs. B) the U.S. auto industry, through its lobbying efforts, managed to promote the general public interest. C) the net social benefits of import quotas were positive. D) all of the above E) none of the above
Over a given period of time, if imports are greater than exports, the result is
A. A trade surplus. B. A trade deficit. C. An embargo. D. A trade war.