If tariffs contribute to inefficiency in the international allocation of resources and lower output and income, why have nations enacted tariffs?
What will be an ideal response?
Tariffs may be enacted to raise revenue. Tariffs may also be enacted for largely political reasons and are often a result of the so-called special interest effect. The industries and workers most affected by import competition have a very large stake in seeing that competition is restricted and they will lobby very hard for protection. The costs of these restrictions are spread over a large number of consumers and their impact is usually not so great to arouse these consumers to vote against those who might support selected tariffs.
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It is difficult for a private market to provide the economically efficient quantity of a public good because
A) by law governments cannot use cost-benefit analysis to determine this quantity. B) it is too expensive to produce the necessary amount of the good. C) individual preferences are not revealed in the market for the good. D) public goods produce positive and negative externalities.
Which of the following would be part of the nation's financial account?
A) A night club show seen by an American in Mexico City B) A dividend from a British equity owned by an American C) A payment to the Philippine government for the use of military bases in their country D) One hundred shares of British Petroleum stock purchased by an American
Buying securities on the margin requires people interested in buying stocks to pay only a percentage (a margin) of the actual purchase price. The rest is borrowed from someone else, usually an investor's broker
Indicate whether the statement is true or false
The following Phillips curve of would be consistent with the _____ model(s)
a. Keynesian. b. monetarist. c. monetarist and classical. d. classical. e. None of the above