If a Country Allows Trade And, for a Certain Good

question 33

Multiple Choice

If a country allows trade and, for a certain good, the domestic price without trade is lower than the world price,

• A) the country will be an exporter of the good.
• B) the country will be an importer of the good.
• C) the country will be neither an exporter nor an importer of the good.
• D) Additional information is needed about demand to determine whether the country will be an exporter of the good, an importer of the good, or neither.

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Definitions:

State Unemployment

A program providing financial assistance to unemployed workers from their state government.

Federal Unemployment Taxes

Taxes paid by employers to the federal government to fund unemployment benefits for workers who lose their jobs.

Payroll Tax Expense

Taxes that employers are required to pay on behalf of their employees, such as social security and Medicare taxes.

Wage Base Limits

The maximum amount of income that is subject to social security or other payroll taxes within a tax year.