Assume There Is a Decrease in the Supply of a Product

question 34

True/False

Assume there is a decrease in the supply of a product produced in a perfectly competitive market.All else constant,in the short run this will cause the profits of firms that produce substitutes for the good in question to increase.

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Definitions:

Net Capital Outflow

The difference between the purchase of foreign assets by domestic residents and the purchase of domestic assets by foreigners over a certain period.

Net Exports

The net amount obtained by subtracting the total imports from the total exports of a country.

Internationalized

The process of designing products, services, or operations to facilitate operation or distribution in multiple countries.

Budget Deficit

The financial shortfall when a government's expenditures exceed its revenues over a specified period.