What are the different types of trade barriers? What are the arguments for trade barriers? What are the consequences of trade barriers?
Trade barriers include the use of embargoes, tariffs, quotas, and administrative barriers to limit the supply of foreign products in the domestic economy. Arguments for trade barriers include the infant industry, national security, employment, and cheap foreign labor arguments.
Trade barriers reduce the supply of foreign products, which increases their prices. This makes the domestically produced substitute more price-competitive, which increases the demand for the domestically produced product. As a result, the domestically produced product's price increases and its sales increase. Notice that the results of trade barriers are higher priced products (both foreign and domestically produced) consumers must pay.
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In the IS curve, at __________ income levels, saving is __________, so the interest rate must be __________ to expand investment
A) higher; smaller; lower B) higher; larger; higher C) higher; larger; lower D) lower; larger; lower
Unlike a money supply target, an inflation rate target
a. will always stabilize income better. b. will stabilize income better if velocity is unstable. c. still allows the Fed unlimited discretion. d. eliminates the need for a central bank.