3. The effects of a tariff are A. reduced quantity supplied? overall, reduced qu
ID: 1173807 • Letter: 3
Question
3. The effects of a tariff are A. reduced quantity supplied? overall, reduced quantity supplied by domestic? producers, and a lower price. B. reduced quantity supplied? overall, decreased quantity supplied by domestic? producers, and a lower price. C. identical to the effects of a? quota, except that the price of the good is higher. D. reduced quantity supplied? overall, increased quantity supplied by domestic? producers, and a higher price.
4. If interest rates in the European Union? decrease,
A.
nothing will change in the foreign exchange market.
B.
the demand for U.S. dollars will fall in the foreign exchange market.
C.
the demand for euros will fall in the foreign exchange market.
D.
the supply of U.S. dollars will fall in the foreign exchange market.
8. Assume that maximum feasible hourly productions levels if all resources are utilized in the United States are either 8 yards of fabric or 4 bushels of wheat. Maximum feasible production levels if all resources are utilized in Japan are either 3 yards of fabric or 6 bushels of wheat. Based on this information
A.
the United States will benefit from trading but Japan will not.
B.
both nations will gain from specialization and? trade, with the United States exporting wheat and Japan exporting fabric.
C.
beneficial trade is absolutely impossible between the two countries.
D.
both nations will gain from specialization and? trade, with the United States exporting fabric and Japan exporting wheat.
Explanation / Answer
3. Tariff increases the domestic price level and at that higher price, quantity supplied by domestic producers increases. Therefore, the effect of tariff is reduced quantity supplied overall(as tariff hurts domestic purchasers), increased quantity supplied by domestic producers, and a higher price.
Answer - option D
4. The lower EU interest rates tend to be unattractive for foreign investors, and thus decreases the demand for and value of euro.
Answer- option C
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