Which of the following is not a short-run impact of increasing tariffs on the American industries they seek to protect?
a. government tax revenues increase
b. domestic production and sales by the protected industries increase
c. consumers' real incomes decrease
d. total domestic and foreign sales of those products in the United States increase
Question 2
The U.S. government establishing a policy that it will bail out troubled financial institutions and a resulting increase in the number of bank failures is an example of:
a. the moral hazard problem.
b. the free rider problem.
c. the adverse selection problem.
d. the lemon problem.
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