General equilibrium considerations lead to the realization that import-substituting policies have the effect of
A) discouraging exports.
B) encouraging exports.
C) encouraging an efficient use of a country's resources.
D) generating large tariff revenues for the government.
E) creating competitive manufacturing sectors.
Question 2
Which of the following statements is the MOST accurate? The law of one price states
A) in competitive markets free of transportation costs and official barriers to trade, identical goods sold in different countries must sell for the same price when their prices are expressed in terms of the same currency.
B) in competitive markets free of transportation costs and official barrier to trade, identical goods sold in the same country must sell for the same price when their prices are expressed in terms of the same currency.
C) in competitive markets free of transportation costs and official barrier to trade, identical goods sold in different countries must sell for the same price.
D) identical goods sold in different countries must sell for the same price when their prices are expressed in terms of the same currency.
E) in competitive markets free of official barrier to trade, identical goods are sold at the same price regardless of transportation costs.
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