1. A trade quota:
- is an explicit limit on the
amount of exports of a good from a country.
- is an explicit limit on the
amount of imports of a good into a country.
- is a tax only on exports.
- is a tax only on imports.
2. An import tariff:
- is an explicit limit on the
amount of exports of a good from a country.
- is an explicit limit on the
amount of imports of a good into a country.
- is a tax only on exports.
- is a tax only on imports.
3. While an import tariff on
a good will both raise the domestic price of that good and its
domestic production levels, a quota:
- will not raise the domestic
price but will increase the amount of the good produced
domestically.
- will raise the domestic price
but will not increase the amount of the good produced
domestically.
- will both raise the domestic
price and increase the amount of the good produced
domestically.
- will neither raise the
domestic price nor increase the amount of the good
produced domestically.
4. If the dollar price of
the German mark increases, then:
- the German Mark has
appreciated while the U.S. dollar has depreciated.
- the German Mark has
depreciated while the U.S. dollar has appreciated.
- both the German Mark and the
U.S. dollar have depreciated.
- both the German Mark and the
U.S. dollar have appreciated.
5. An exchange rate
measures:
- the price at which one can
exchange one good for another good.
- the price at which one can
exchange one resource for another resource.
- the discounted price one
received when returning defective goods for exchange.
- the price at which one can
exchange one currency for another currency.
6. Consider the following
two statements:
- The U.S. dollar will
depreciate when U.S. Demand for foreign goods increases.
- The U.S. dollar will
depreciate in the present if the public believes that the
U.S. dollar will depreciate in the future.
- both statements are true.
- both statements are false.
- I is true while II is false.
- I is false while II is true.
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