The Graph Shown Demonstrates the Domestic Demand and Supply for a Good

question 61

Multiple Choice

The graph shown demonstrates the domestic demand and supply for a good, as well as the world price for that good. If this economy were to open to free trade:

• A)consumer surplus would be $605.
• B)total surplus would be $1,370.
• C)producer surplus would be $605.
• D)deadweight loss would be $160.

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Definitions:

Current Account Surplus

A situation where a country's total exports of goods, services, and transfers exceed its total imports.

Financial Accounts Deficit

A situation where a country's payments to other countries exceed its earnings from them, specifically in the realm of investment flows and financial transactions.

Capital Account

A national account that shows the net change in asset ownership for a nation, including assets in foreign investments and movements of capital.

Trade Deficit

A situation where a country's imports exceed its exports in value.