Governments choose to use voluntary export restraints (VERs) rather than tariffs because
A. voluntary export restraints do not generate any welfare loss in the importing country.
B. tariffs more obviously violate the international rules of the World Trade Organization (WTO).
C. the increase in the price of the imported good in the domestic market is lower in the case of a VER than a tariff.
D. voluntary export restraints have the potential to generate higher revenue.
Answer: B
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Price ceilings and price floors that are binding
a. are desirable because they make markets more efficient and more fair. b. cause surpluses and shortages to persist because price cannot adjust to the market equilibrium price. c. can have the effect of restoring a market to equilibrium. d. are imposed because they can make the poor in the economy better off without causing adverse effects.
When the Fed wants to lower the federal funds rate, it ________.
A. increases the reserve requirement B. increases the prime rate C. buys bonds from banks and the public D. increases the discount rate
Refer to the figure above. What is the consumer surplus after Barylia opens up to free trade?
A) $75 B) $90 C) $100 D) $125
The investment function implies that current output does not influence investment. Does that make sense?
What will be an ideal response?