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Question
Exporting nations often agree to voluntary export restraints in an attempt to
a. increase global welfare.
b. employ more workers in the importing nation.
c. decrease inflation.
d. avoid more-restrictive trade policies.
e. increase inflation.
Answer
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What is the long-run consequence of a price ceiling law?
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Suppose Solomon lives in a community with no price controls. What do you expect will happen if his town borders a community where there is a binding price ceiling on most products?
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