The "Buy American" provision in the 2009 stimulus package required that stimulus money be spent only on U.S.-made goods, effectively acting as a quota of zero imports when stimulus money was being spent. In the market for steel, the "Buy American"
provision would ________ the price of steel in the United States and ________ the quantity of steel demanded in the United States.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
Answer: B
You might also like to view...
If inputs into production cannot be substituted for each other but have to be employed in fixed proportions, isoquants are straight, downward-sloping lines
Indicate whether the statement is true or false
You manage a new product development team for an electronics manufacturer, and your firm's policy is that all new projects must pay for themselves in the first five years
Your team has projected that the first year of the project requires an initial investment of $2 million with no revenue, the second year loss is $500,000, the net revenue for year 3 is zero, and you earn $1.8 million in both year 4 and year 5. If the opportunity cost of capital for your firm is 8%, should you go ahead with this project? A) No, the expected NPV is negative B) Yes, the expected NPV is roughly $290,000 C) Yes, the expected NPV is $1.1 million D) We do not have enough information to answer this question.