Which of the following would be the most likely long-run effect if the United States increased its tariff rates and adopted stricter import quotas?
a. a decrease in both U.S. imports and exports
b. an increase in both U.S. imports and exports
c. a decrease in U.S. imports and an increase in U.S. exports
d. an increase in U.S. imports and a decrease in U.S. exports
A
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In the new Keynesian model, expected inflation is a function of ________
A) expected future output gaps and markup shocks B) current and past inflation C) unanticipated aggregate demand shocks D) expected growth of the money supply
Assume that business investment spending rises, and the increase is funded by greater borrowing in the capital markets. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the real GDP and net nonreserve international borrowing/lending balance in the context of the Three-Sector-Model? a. Real GDP rises and net nonreserve international
borrowing/lending balance becomes more positive (or less negative). b. Real GDP rises and net nonreserve international borrowing/lending balance becomes more negative (or less positive). c. Real GDP falls and net nonreserve international borrowing/lending balance becomes more positive (or less negative). d. Real GDP and net nonreserve international borrowing/lending balance remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.