Which of the following is the least expansionary policy mix? 35. a) c) governmen

Question

Which of the following is the least expansionary policy mix? 35. a) c) government spending and taxes both rise by $100 billion government spending falls by $100billionand taxes rise by $100 billion government spending rises by $100 billion and taxes fall by $100 billion d) 36. a) government spending falls by $100 billion and taxes fall by $100 billion A tariff is a tax on imports. According to the Ricardian model presented in class: a country should impose tariffs it is has an absolute advantage in all traded goods a country should impose tariffs if the other country traded goods b) has an absolute advantage in all c) a country should impose a tariff in the good in which it has comparative advantage both countries should eliminate tariffs because free trade raises living standards in both James is a mercantilist and John is a proponent of the Ricardian model. Consider a two country model such as the one used in class to illustrate the Ricardian model. Which of the following is true of their views? 37. b) e) d) both James and John would argue that each country should maximize exports and minimize imports neither James nor John would argue that each country should try to maximize exports and minimize imports James would argue that each country should try to maximize exports and minimize imports; John would strongly disagree John would argue that each country should try to maximize exports and minimize imports; James would strongly disagree Suppose that a French winery sells a case of Bordeaux (a type of French wine) to a customer in the U.S. This transaction: 38. credt (ay dest y a) will be recorded as a credit on the U.S. current account b) will be recorded as a credit on the U.S. capital account will be recorded as a debit on the U.S. current account d) will be recorded as a debit on the U.S. capital account 39. Suppose than an American buys a French government bond. This transaction: a) will be recorded as a credit on the U.S. current account will be recorded as a credit on the U.S. capital account c) will be recorded as a debit on the U.S. current account d) will be recorded as a debit on the U.S. capital account

Explanation / Answer

35. Government spending falls by $100billion and taxes rise be $100 billion.

36. Both countries should eliminate tariff because free trade raises living standards in both countries.

37. A) both james and john would argue that each country should maximise exports and minimise imports.

38.c) will be recorded as debit on US current account.

39. B

40.c

41.c

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