If Arnold has a positive rate of time preference, he desires to
a. save in case of inflation
b. consume now rather than later
c. invest in stocks and bonds
d. invest in education
e. plan for retirement
QUESTION 2Which of the following is not an argument often made for the imposition of trade restrictions?
a. trade restrictions are necessary for national defense purposes
b. trade restrictions are necessary to improve economic efficiency
c. trade restrictions are necessary to protect fledgling industries
d. trade restrictions are necessary to protect against dumping
e. trade restrictions are necessary to protect jobs
QUESTION 3If people have a positive rate of time preference, they
a. must be rewarded for saving
b. are willing to pay more for a good that saves them money if they hold on to it a long time
c. prefer to consume in the future when things are cheaper
d. prefer time deposits to savings accounts
e. prefer leisure over labor
QUESTION 4The losers when the United States institutes trade restrictions include
a. U.S. consumers of imported goods, U.S. producers who use imported intermediate goods, and, if other countries retaliate, U.S. exporters
b. U.S. producers of goods that compete with imported goods only
c. U.S. consumers of imported goods and U.S. producers of goods that compete with imported goods
d. all U.S. producers of all goods and U.S. exporters
e. only U.S. exporters
QUESTION 5A positive rate of time preference means that
a. time is relative to consumption
b. consumption in the future is more important than consumption today
c. consumption today is valued less than consumption in the future
d. consumption in the future is valued less than consumption today
e. consumption in the future and consumption today are positively related
QUESTION 6Which of the following is not a problem with trade restrictions?
a. the high cost of rent-seeking activities such as lobbying
b. the high cost of enforcement
c. the unintended effects on related industries
d. the inability to save U.S. jobs in the short run in industries that compete with imports
e. the possibility of retaliation
QUESTION 7The interest rate compensates
a. bankers for their time spent on paperwork
b. borrowers for their increased consumption today
c. savers for consumption forgone today
d. consumers for more consumption today
e. the Fed for its efforts to control the money supply
QUESTION 8If an established domestic industry is in jeopardy of being displaced by lower-priced imports, there could be a rationale for
a. permanent import restrictions to prevent the decline of the domestic industry
b. temporary import restrictions to allow the orderly adjustment of the domestic industry
c. permanent import restrictions based on the infant industry argument
d. temporary import restrictions based on the infant industry argument
e. temporary import restrictions that will be replaced by permanent tax breaks for the domestic industry
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