The Taiwanese government allows tax credits for domestic producers who compete with manufacturers in First World nations. This suggests that Taiwan engages in _____
a. trade protectionism
b. export substitution
c. foreign exchange market intervention
d. import substitution
e. voluntary export restrictions
b
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The Interstate Commerce Commission (ICC) regulates railroads, barges and trucks. Suppose technical change lowers the costs of railroads
As a result, the ICC permits railroads to lower prices some but also alters the rates of barges and trucks so they get additional business. The ICC would be acting consistently with A) the capture theory of regulation. B) the public interest theory of regulation. C) the share-the-gains, share-the-pains theory of regulation. D) None of the theories presented in the text since economic regulation is specific to a single industry and not to agencies that cover more than one industry. That is the province of social regulation.
In an economy, for every $1600 decrease in income, spending falls by $1200. It can be concluded that the:
A. Slope of the saving schedule is 1.33 B. Slope of the saving schedule is 0.75 C. Marginal propensity to consume is 1.33 D. Marginal propensity to save is .25