Author Question: If an import-competing firm is the only domestic producer of a good, then a transition from autarky ... (Read 50 times)

NClaborn · **on:** Jun 30, 2018

If an import-competing firm is the only domestic producer of a good, then a transition from autarky to free trade will ________ domestic price, ________ producer surplus, ________ consumer surplus, and ________ overall domestic national welfare.

A) decrease; decrease; increase; increase
B) increase; increase; increase; increase
C) decrease; decrease; decrease; decrease
D) increase; increase; decrease; decrease
E) increase; increase; decrease; increase

Question 2

As a country begins to liberalize its capital account, what would you expect to happen to the difference between the interest rates for similar assets in this country and another country with open capital markets?

A) get larger
B) get smaller
C) stay the same
D) it depends on the existing exchange rate.
E) exponential divergence