What must a government know for the infant industry argument to be a valid reason for imposing tariffs?
What will be an ideal response?
The government must be able to determine what industries will eventually be able to survive without protection, but cannot survive initially without protection. Hence, they would need to know a great deal about technology in the industry, input prices, world demand for the good, and many other things.
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If the FOMC orders the sale of T-bills in the open market, then bank reserves are
a. decreased, but the money supply will remain unchanged. b. decreased, and a multiple contraction of the money supply will occur. c. increased, but the money supply will remain unchanged. d. increased, and a multiple expansion of the money supply will occur.
In the long run, a perfectly competitive firm will react to losses by: a. reducing production or shutting down. b. reducing its inputs. c. increasing its output
d. increasing the price of its product.