All of the following are advantages of organizing a business as a sole proprietorship EXCEPT
A) ease of formation.
B) limited liability.
C) ease of decision-making.
D) single taxation.
Answer: B
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An export subsidy has the opposite effect on terms of trade to the effect of an import tariff. Domestically a tariff will raise the price of the import good, deteriorating the domestic terms of trade
A production subsidy for the export product will lower the local price of the export good, lowering the domestic terms of trade for the country. Hence the export subsidy and the import tariff have the same effect. This analysis seems to contradict the first sentence in this paragraph. Discuss this paradox.
Which currency is most commonly traded?
What will be an ideal response?
Explain briefly the following concepts:
(a) Increasing returns to scale (b) Decreasing returns to scale (c) Constant returns to scale
If the simple quantity theory of money predicts well, what would we expect to see (in the real world)?
A) changes in the money supply strongly correlated with changes in interest rates B) changes in the money supply strongly correlated with changes in inflation rates C) changes in Real GDP strongly correlated with changes in the money supply D) changes in velocity strongly correlated with changes in the money supply E) none of the above