The self-correcting tendency of the economy means that falling inflation eventually eliminates:

Refer to Figure 7-2. The increase in domestic producer surplus as a result of the tariff is equal to

A) $11.25 million. B) $18 million. C) $32.5 million. D) $45 million.

If the purchasing power of a dollar is less than the purchasing power of the Mexican peso, purchasing power parity would predict that

A) in the short run, the dollar will appreciate relative to the peso to equalize the purchasing power of the dollar and the peso. B) in the short run, the dollar will depreciate relative to the peso to equalize the purchasing power of the dollar and the peso. C) in the long run, the dollar will appreciate relative to the peso to equalize the purchasing power of the dollar and the peso. D) in the long run, the dollar will depreciate relative to the peso to equalize the purchasing power of the dollar and the peso.