Refer to Figure 9-5. The tariff causes domestic consumption of coffee
A) to fall by 7 million pounds. B) to rise by 6 million pounds.
C) to fall by 27 million pounds. D) to rise by 20 million pounds.
A
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The relative quickness with which the Open Market Committee can respond to changes in economic indicators leads the Fed to
A) control precisely the growth rate of the money stock. B) control precisely the growth rate of total spending. C) make more frequent mistakes in monetary policy than Congress makes in executing fiscal policy. D) use the discount rate to control bank lending and hence aggregate demand.
Assume that both the United States and Germany produce beef and computers. The U.S. can produce 200 computers or 1,000 pounds of beef per day. Germany can produce 500 computers or 250 pounds of beef per day. What is the opportunity cost of beef and computer chips in each country? In which good does each country have a comparative advantage? What is the range for mutually beneficial trade in
computers? What will be an ideal response?