For Markets to Be in Equilibrium,that Is,for There to Be

question 73

Multiple Choice

For markets to be in equilibrium,that is,for there to be no strong pressure for prices to depart from their current levels,

• A) The expected rate of return must be equal to the required rate of return; that is, .
• B) The past realized rate of return must be equal to the expected rate of return; that is: .
• C) The required rate of return must equal the realized rate of return; that is, .
• D) All three of the above statements must hold for equilibrium to exist; that is,
• E) None of the above statements is correct.

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Definitions:

Protective Tariff

A tariff designed to shield domestic producers of a good or service from the competition of foreign producers.

Revenue Tariff

A tariff designed to produce income for the federal government.

Import Quota

A government-imposed limit on the quantity of a specific type of good that can be imported into a country over a set period of time.

Protective Tariff

A tariff imposed by a country on imported goods to protect domestic industries from foreign competition by making imported goods more expensive.