1.David Mericle believes that the uncertainty introduced by tariffs will likely have a smaller effect discouraging business investment compared to his expectations a couple of months ago.
A: True
2. In a free trade equilibrium, relative to a no-trade scenario, domestic consumption of a good will:
A: Increase due to lower world prices.
3. In the podcast, David Mericle suggests that comparing the current economic outlook under larger tariffs to the stagflation of the 1970s is inappropriate primarily because:
A: The impact on the price level is still considered a one-time event
4. Say that Alland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Georgeland can produce 24 units of food per year or 12 units of clothing. Which of the following is true?
A: Alland has an absolute advantage in producing food but will not trade with Georgeland.
5. If the government legislates policies that block imports of solar panels and gives domestic manufacturers a $5 billion dollar tax subsidy, the benefits to the U.S. solar panel manufacturing and distribution industry will be very visible. The bearers of the cost of the tax subsidy:
A: are more anonymous.