If the macro equilibrium is below the full employment level (to the left of the
ID: 1129179 • Letter: I
Question
If the macro equilibrium is below the full employment level (to the left of the natural rate of output), an increase in aggregate demand will
Decrease prices and decrease output.
Decrease prices and increase output.
Increase prices and decrease output.
Increase prices and increase output.
If the world price is above the domestic price, the country will ________ the good.
Import
Export
Impossible to tell
The "infant industry" argument for trade restrictions argues that
National security would be threatened by reliance on imports in a specific industry.
Certain industries will become more competitive and more profitable in time.
Society needs to protect jobs at all costs.
Foreign competition may be receiving unfair assistance from other governments.
A trade deficit occurs when a country's net exports is
Less than zero.
Equal to zero.
Greater than zero.
A.Decrease prices and decrease output.
B.Decrease prices and increase output.
C.Increase prices and decrease output.
D.Increase prices and increase output.
Explanation / Answer
Q1)
Increases price and decreases output.
Q2)
In this case country will certainly export that good.
Q3)
Certain industry will become more productive and competitive over the time hence protection to be provided at the beginning from competition.
Q4)
Trade deficit when net export is less than zero