Why are cooperative arrangements difficult to negotiate and maintain?
A) They require a long-term policy commitment, but politics is often focused on the short run.
B) No one understands the benefits and consequences.
C) Trading nations do not trust one another.
D) They have to be approved by the IMF, which takes years to accomplish.
Ans: A) They require a long-term policy commitment, but politics is often focused on the short run.
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Gasoline prices increase by 50 percent and other things remain the same. As a result, there is
A) an increase in the demand for gasoline. B) a decrease in the demand for gasoline. C) no change in the quantity of gasoline demanded. D) a decrease in the quantity of gasoline demanded. E) More information is needed to determine if the demand for gasoline increases or decreases.
The quantity of imports will increase when there is
A) a reduction in the real exchange rate. B) an increase in domestic output. C) an increase in foreign output. D) all of the above E) none of the above