Which of the following statements about international trade restrictions is true?
a. They ensure that only efficient producers survive.
b. They ensure that countries specialize only in those products that they can produce most efficiently.
c. They harm domestic consumers in the majority of cases.
d. They typically benefit foreign producers at the expense of domestic consumers.
e. They ensure that higher-quality goods are provided at lower prices.
c
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In 2008, the Treasury and Federal Reserve took action to save large financial firms such as Bear Stearns and AIG from failing. Which of the following is one reason why these measures were taken?
A) The Fed and the Treasury wanted to allow Freddie Mac and Fannie Mae more time to buy the firms before they went bankrupt. B) The Emergency Economic Stabilization Act required the Fed and the Treasury to provide financial assistance to firms that participated in regular open market actions with the Fed. C) The bankruptcy of a large financial firm would force the firm to sell its holdings of securities, which could cause other firms that hold these securities to also fail. D) The failure of these firms would have forced the Fed to increase interest rates, which could have led to a severe recession.
The demand curve for the product of a monopolistic competitor
A) is the same as the market demand curve. B) is horizontal. C) is vertical. D) slopes downward.