Which of the following is the correct name of the free-trade agreement between Mexico, the U.S., and Canada?
a. The American Free Trade Agreement (AFTA).
b. The North American Free Trade Agreement (NAFTA).
c. The Pacific Free Trade Agreement (PFTA).
d. The Trans-American Free Trade Agreement (TAFA).
QUESTION 2If, for a given disposable income level, the disposable income line lies below the consumption curve, saving:
a. equals consumption.
b. equals disposable income.
c. is less than zero.
d. is equal to zero.
e. is greater than zero.
QUESTION 3When the U. S. federal government runs a budget deficit, it borrows money by selling:
a. Treasury bills, notes, and bonds.
b. publicly owned land.
c. its gold reserves.
d. financial assets located in foreign banks.
QUESTION 4The main explanation for why the cheap foreign labor argument is a poor reason for restricting international trade is that:
a. workers who get paid less tend to have lower productivity than those who get paid more.
b. all firms and workers gain when there are no restrictions on international trade.
c. infant industries such as steel and automobiles need to be protected.
d. specialization and free trade usually raise the prices of all the traded goods, so that the workers can get paid more.
e. labor costs tend to be the same worldwide in the long run because of worker mobility.
QUESTION 5If, for a given disposable income level, the disposable income line lies above the consumption curve, saving:
a. equals consumption.
b. equals disposable income.
c. is less than zero.
d. is equal to zero.
e. is greater than zero.
QUESTION 6If the federal government were to run a budget deficit, this would:
a. increase the size of the national debt.
b. reduce the size of the national debt.
c. leave the size of the national debt unchanged.
d. increase the national debt only if the government also expands the supply of money.
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