The infant industry argument for trade protectionism holds that
A) new industries sometimes need a protective environment in which to grow so that they can compete with older, more established foreign competitors.
B) foreign competitors are often viewed as "infants" by large U.S. firms.
C) tariffs are often preferred to quotas.
D) quotas raise prices more than tariffs raise prices.
E) a and c
A
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If the nominal interest rate is less than the equilibrium nominal interest rate determined in the money market, then households and firms
A) are holding less money than they prefer. B) are holding more money than they prefer. C) expect real GDP to increase. D) expect the price level to increase. E) expect the nominal interest rate to decrease.
What does the sign (positive/negative) of the cross elasticity of demand tell us about the relationship between two goods?
What will be an ideal response?