The countries most likely to be successful at using trade retaliation are large trading countries.

In the medium run, a tax increase that causes a reduction in the budget deficit will

A) affect only the price level. B) not affect the price level but will alter the composition of output. C) not affect the level of output, but will affect the composition of output. D) affect both the level and composition of output.

Every unit of good x that is produced in the United States is exported to other countries. An increase in the price of good x shows up

a. in the consumer price index and in the GDP deflator. b. in the consumer price index, but not in the GDP deflator. c. in the GDP deflator, but not in the consumer price index. d. in neither the consumer price index nor in the GDP deflator.