More productive workers receive higher wages than less productive workers. This observation is a major flaw in which of the following arguments for protectionism?
a. The infant industry argument. b. The national security argument.
c. The employment argument. d. The cheap foreign labor argument.
QUESTION 2That part of disposable income not spent on consumption is:
a. saved.
b. invested.
c. wasted.
d. borrowed.
QUESTION 3Which of the following is true?
a. A budget deficit will have no impact on the national debt.
b. A budget deficit will increase the national debt.
c. A balanced budget will increase the national debt.
d. A budget surplus will increase the national debt.
QUESTION 4The argument that foreign trade should be restricted to protect domestic employment and output is based on the idea that:
a. consumers are willing to pay higher prices for domestic goods.
b. producers will not exploit reduced foreign competition by charging higher prices.
c. foreign companies are more costly to deal with than domestic companies.
d. sales of imports come at the expense of domestic goods and jobs.
QUESTION 5If disposable income is 400 billion, autonomous consumption is 60 billion, and MPC is 0.8, what is the level of saving?
a. 20 billion.
b. 210 billion.
c. 380 billion.
d. 590 billion.
e. 780 billion.
QUESTION 6Between 1998 and 2001, the federal budget was:
a. never in surplus.
b. in surplus about as often as it was in deficit.
c. in surplus.
d. never in deficit.
QUESTION 7The argument that import restrictions save jobs and promote prosperity fails to recognize that:
a. there are no secondary effects of import restrictions.
b. import restrictions will lower prices in the protected industries.
c. import restrictions cannot create jobs in any industries.
d. U.S. imports provide people in other countries with the dollars power required for the purchase of U.S. exports.
QUESTION 8If disposable income is 400 billion, consumption spending is 380 billion, and MPC is 0.5, what is the level of saving?
a. 20 billion.
b. 210 billion.
c. 380 billion.
d. 590 billion.
e. 780 billion.
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