Protection in the form of tariffs or quotas is a very inefficient tool for job creation and preservation.
Indicate whether the statement is true or false
Question 2 - Which of the following is TRUE?
A) Adam Smith proposed the theory of comparative advantage as the basis for trade in The Wealth of Nations.
B) David Ricardo proposed the theory of absolute advantage as the basis for trade.
C) Absolute advantage is based on comparing the opportunity costs of trading partners.
D) The Ricardian model assumes labor is perfectly mobile.
Question 3 - Arbitrage operations can be executed
A) in foreign exchange markets.
B) in goods markets.
C) Both A and B.
D) None of the above.
Question 4 - What is meant by predatory dumping? How likely is it for this to occur in the United States? Discuss.
What will be an ideal response?
Question 5 - An austerity policy is
A) an increase in the money supply.
B) an expenditure reduction and expenditure switching policy.
C) an expansionary fiscal policy accompanied by decreases in taxes, increases in expenditures, or both.
D) an exchange rate switching policy from a fixed to a flexible exchange rate system.
E) None of the above.
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