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

question 2

Multiple Choice

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

• A)drop from 815 units to 500 units.
• B)drop from 815 units to 250 units.
• C)increase from 250 units to 500 units.
• D)increase from 815 units to 1,500 units.

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Definitions:

Large Banks

Financial institutions with a significant amount of total assets, offering a wide range of financial services.

Small Banks

Financial institutions with a smaller asset base and local focus providing banking services to individuals and businesses in their communities.

Primary Reserves

Funds that financial institutions must hold in physical form, such as cash in vaults or deposits with central banks, as a measure of liquidity and financial stability.

Secondary Reserves

Liquid assets held by financial institutions as backup funds for unforeseen needs, not directly utilized in lending or investment.