The "Buy American" Provision in the 2009 Stimulus Package Required

question 81

Multiple Choice

The "Buy American" provision in the 2009 stimulus package required that stimulus money be spent only on U.S.-made goods, effectively acting as a quota of zero imports when stimulus money was being spent. In the U.S. steel market, a "Buy American" provision in the 2009 stimulus package would

• A) convert some consumer surplus to deadweight loss.
• B) transfer some deadweight loss to producer surplus.
• C) transfer some producer surplus to consumer surplus.
• D) reduce the producer surplus received by foreign manufacturers.

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Definitions:

Undue Influence

An illegitimate power exercised by one person over another in order to induce the latter to make a decision or a legal transaction that greatly benefits the former.

Non Est Factum

A legal defense claiming that a contract is invalid because the signer was unaware of its nature due to an honest mistake.

Functionally Illiterate

The condition of having limited reading and writing skills that are insufficient for everyday needs.

Mistake of Fact

A misunderstanding or incorrect belief regarding a fact that is material to a contract at the time of its formation, potentially rendering the contract voidable.