Of the following, who gains because of tariffs and why?
A) domestic producers of protected goods because they can sell at a higher price
B) domestic buyers because they can be sure of buying high-quality products
C) foreign producers because they earn more total revenue
D) foreign government because they gain more revenue
E) domestic buyers because they pay a lower price
A
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Suppose the government wants to maintain a balanced budget. To achieve this goal, when the economy falls into recession government would need to ________ taxes, which would cause aggregate demand to ________
A) increase; decrease B) decrease; increase C) decrease; decrease D) increase; increase
Research on labor supply generally shows that
A. labor supply rises in response to a permanent increase in the real wage, but falls in response to a temporary increase in the real wage. B. labor supply rises in response to both a temporary and a permanent increase in the real wage. C. labor supply rises in response to a temporary increase in the real wage, but falls in response to a permanent increase in the real wage. D. labor supply falls in response to both a temporary and a permanent increase in the real wage.