The government proposes a tax on imported champagne. Buyers will bear the entire burden of the tax if the
A) demand curve for imported champagne is horizontal.
B) demand curve is downward sloping and the supply curve is upward sloping.
C) demand curve for imported champagne is vertical.
D) supply curve for imported champagne is vertical.
C
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In trade, if—due to technology—a nation can produce a good (such as Germany's production of snowboards) with fewest resources, it is known as a(n):
a. absolute advantage. b. technology advantage. c. comparative advantage. d. resource advantage.
The purchasing power parity hypothesis implies that an increase in inflation in one country relative to another will over a long period of time
a. increase exports b. reduce the competitive pressure on prices c. lower the value of the currency in the country with the higher inflation rate d. increase foreign aid e. increase the speculative demand for the currency