Assume an auto firm's factories are capable of producing both large and small cars and are operating at full capacity. Assume the price of large cars increases due to a shift in consumers' preferences toward large cars and away from smaller cars
What would reasonably be expected to happen to the equilibrium price and quantity of the firm's small cars? A) Equilibrium price would increase and equilibrium quantity would decrease.
B) Equilibrium price and quantity would both decrease.
C) Equilibrium price would decrease and equilibrium quantity would increase.
D) Equilibrium price and quantity would both increase.
B
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Describe the effects of contractionary monetary policy by the domestic central bank on output, the real interest rate, and net exports in both the domestic and foreign country, using a Keynesian model in the short run
What happens in the long run? Show a diagram to illustrate the short- and long-run effects in both countries.
Trade adjustment assistance in the United States began in 1962. The program
A. was designed to provide assistance to firms or workers who suffer idle facilities, unprofitability, and unemployment because of sharp increases in imports. B. provided little assistance to victims of free trade before the 1970s. C. was enlarged and worker benefits were extended in 1981 by the Reagan administration. D. All of the above are correct.