Suppose that televisions are produced both domestically and abroad. What would a ban on imported televisions do to the price of televisions, the quantity of televisions, and the output of the domestic television industry?
What will be an ideal response?
A ban on imported televisions would lead to a leftward shift in the total supply, so price increases and quantity decreases. However, since supply is upward sloping, it is evident that domestic production will increase in the case of an import ban.
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When the labor market is in equilibrium, real GDP ________ potential GDP
A) is greater than B) is equal to C) is less than D) might be greater than, less than, or equal to E) is not comparable to
Critics of the current system of flexible exchange rates allege that it
a. promotes inflation b. promotes unemployment c. gives central banks too little discretion over their money supplies d. restricts the growth of developing countries e. gives too much financial power to industrial countries