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If imposing tariffs and quotas harms consumers, why don't consumers vigorously oppose the implementation of these protectionist policies?
Why does rent seeking imply that the traditional measure of deadweight loss from tariffs and quotas will likely understate the true deadweight loss to society?
Identify the significance of each of these news items to the U.S. economy and whether they are likely to affect international trade.
If the demand for a domestic currency decreases in a country using fixed exchange rate system, what must the central bank do to keep the currency value steady?
What happens to the supply curve for dollars in the currency market under the following conditions? Americans wish to buy more Japanese consumer electronics.
When a hockey team spends more to get better players, it is more successful, which proves that all the teams should spend more to get better players.
The automotive revolution after World War II reduced the time involved for travel. Identify two ways in which vehicle manufacturers evoked new wants.
You work as a tutor at your school, making $15 per hour. What was the opportunity cost of this decision in dollars?
What is Mark's marginal benefit of the third trip? How many times would Mark be willing and able to go in a year? What if the price was $20 per day? Explain.
If the widget producer could sell at $60 per unit however many he could produce, how many would he choose to produce?
What are the expected marginal costs? How would the following conditions change your benefit-cost equation?
What behaviour is the Chinese government attempting to promote with these types of incentives?
Farmer Fran can grow soybeans and corn. She can grow 1500 kilogram of soybeans or 3000 kilogram of corn on a hectare of her land. What should she specialize in?
Why is it important that the country or region with the lower opportunity cost produce the good?
Discuss what are the three basic economic questions? How are decisions made differently in a market economy than in command economies?
Recently, the American Film Institute selected Citizen Kane. Do you think Hollywood will make more movies like Titanic or more like Citizen Kane? Why?
Why do people who live in countries experiencing rapid inflation often prefer to hold American dollars rather than their own country's currency? Explain.
Why would the increasing liquidity of savings accounts make some monetary economists track the size of M1 plus savings account balances (called MZM) over time?
If the required reserve ratio is 10 percent, calculate the potential change in demand deposits under the given circumstances.
Calculate the magnitude of the money multiplier if banks were to hold 100 percent of deposits in reserve. Would banks be able to create money in such a case?
How is central bank independence related to average inflation rates across countries? How is the Fed insulated from executive branch pressures?
Why does the fact that the Fed finances its operations out of interest earned on its portfolio, with the excess returned to the U.S. Treasury.
How does an open market purchase by the Fed increase bank reserves? How does it increase the money supply?
Why would the Fed seldom do an open market purchase of government securities at the same time that it raises the discount rate or the required reserve ratio?
Why is a reduction in the required reserve ratio such a powerful monetary policy tool? Why is it so seldom used?