Suppose There Are Two Countries That Are Identical in Every

question 60

Multiple Choice

Suppose there are two countries that are identical in every way with the following exception: Country A has a lower depreciation rate (δ) than country B.Given this information,we know with certainty that

• A)the growth rate will be the same in the two countries.
• B)the growth rate will be higher in A than in B.
• C)K / N will be higher in B.
• D)Y / N will be higher in B.

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Definitions:

Quota

Limit set on the amounts of particular products that can be imported.

Dumping

Selling products abroad at prices below production costs or below typical prices in the home market to capture market share from domestic competitors.

Cost of Production

The total expenses incurred in the production of goods or services, including raw materials, labor, and overheads.

Protective Tariffs

are taxes imposed on imported goods to protect domestic industries from foreign competition by making imported goods more expensive.