The combined effects of a fiscal contraction and a monetary expansion are
a. higher real interest rates.
b. exchange rate depreciation.
c. increased current account deficit.
d. All of the above are correct.
b
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According to the graph shown, if this economy were open to free trade, and decided to impose a tariff, the domestic quantity demanded would:
This graph demonstrates the domestic demand and supply for a good, as well as a tariff and the world price for that good.
A. decrease from 1500 to 1150.
B. increase from 1150 to 1500.
C. increase from 815 to 1150.
D. decrease from 1150 to 815.
Who is affected when a Pigouvian tax is imposed on a market with a negative production externality?
A. Producers B. Consumers C. Those affected by the externality D. All of these groups are affected when it becomes internalized.