Economic Theory in General, and Trade Theory in Particular Are

question 3

Essay

Economic theory in general, and trade theory in particular are replete with equivalencies. For example, it is argued that for any specific tariff one can find an equivalent ad valorum tariff; and that for any quota one can calculate a tariff equivalent. Discuss conditions or situations under which a specific and an ad valorum tariff are not equivalent. Discuss conditions or situations when a tariff and a quota are not equivalent.

Comprehend the liquidity preference theory and its implications for the money-supply curve.

Describe how changes in the money supply affect equilibrium in the money market.

Interpret the Federal Reserve's role in setting monetary policy targets.

Analyze the effect of monetary policy on aggregate demand and the slope of the aggregate-demand curve.

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Definitions:

Crystallized Intelligence

Crystallized intelligence is the ability to use skills, knowledge, and experience; it does not equate to memory or knowledge but rather the ability to use them appropriately.

Reasoning

Analyzing a subject methodically through logical reasoning to reach a decision or judgement.

Prior Knowledge

Information and understandings that individuals bring to a new learning experience, influencing how they absorb new information.