Assuming perfect capital mobility and flexible exchange rates, then
a. monetary policy is ineffective while fiscal policy is highly effective.
b. fiscal policy is completely ineffective while monetary policy is highly effective.
c. both monetary policy and fiscal policy are effective.
d. monetary policy is less effective than fiscal policy.
B
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According to the law of demand, if the price of a netbook decreases, ceteris paribus, the demand for netbooks would increase
a. True b. False Indicate whether the statement is true or false
The basic difference between a tariff and quota is that:
a. quota can be imposed both on imports and exports whereas a tariff can be imposed only on imports. b. quota yields revenue to the government whereas tariff does not yield any revenue. c. tariff reduces the import of the goods with greater certainty than quota as the amount of import restricted by quota depends on the price elasticity of demand for importable. d. tariff is a quantitative restriction on imports whereas quota is an import duty. e. a tariff raises the price of the product only in the domestic market whereas with a quota, both domestic and foreign producers receive a higher price.