Which of the following is an important difference between tariffs and import quotas?
a. Tariffs affect goods leaving the country to be sold, and import quotas affect goods coming in.
b. The government receives revenue from tariffs but does not collect money for import quotas.
c. Import quotas lower prices and increase consumer surplus, whereas tariffs do the opposite.
d. Tariffs support the growth of domestic industry, and import quotas help foreign producers.
b. The government receives revenue from tariffs but does not collect money for import quotas.
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Most t-shirts bought by Americans are made in Asia. U.S. consumers of t-shirts buy these t-shirts because
A) they pay a higher price for t-shirts made in Asia than they would for similar shirts made in the United States. B) they pay a lower price for t-shirts made in Asia than they would for similar shirts made in the United States. C) they must buy some goods or services produced in Asia. D) by so doing they are helping preserve U.S. jobs producing t-shirts. E) they know that the United States has a comparative advantage in wearing t-shirts.
Between 1970 and 2010, the poverty rate in East Asia declined dramatically from about 60 percent to less than 1 percent, while the poverty rate in Sub-Saharan Africa decreased from 40 percent to only 24 percent. The main reason for this is that
A) The countries of East Asia have progressive income tax systems. The countries of Sub-Saharan Africa all have regressive income tax systems. B) Governments in East Asia increased transfer payments to poor families over this period of time. The governments of Sub-Saharan Africa had practically no transfer payment programs from 1970 to 2010. C) the population growth rate decreased in East Asia and increased in Sub-Saharan Africa. D) East Asia experienced higher economic growth than Sub-Saharan Africa.
If foreign holdings of U.S. dollars increase, holding all else constant
A) the balance on the U.S. financial account will increase. B) the balance on the U.S. current account will increase. C) the U.S. balance of trade will increase. D) the balance on the U.S. capital account will increase.
In a bank panic, the source of contagion is the
A) free-rider problem. B) too-big-to-fail problem. C) transactions cost problem. D) asymmetric information problem.