The Following Question Are Based on the Following Graph

question 29

Multiple Choice

The following question are based on the following graph. The curves D and S represent the market demand and supply curves for farm products in 1960. The curves D₁ and S₁ represent the market demand and supply curves for farm products in 2000. It is supposed that there were no support programs in either year.

-The relatively small shift of the demand curve over the 40 years can be attributed to the fact that

• A) the quantity of food demanded does not vary much with the price of food because food is a necessity.
• B) consumption of food per capita faces natural limits and hence responds by only a small amount to changes in per capita income.
• C) farmers have only limited control over their outputs.
• D) there has been rapid technological change in agriculture.
• E) poor climatological conditions led to decreasing harvests.

Explain the relationship between domestic savings, domestic investments, and net exports.

Analyze the impact of currency appreciation and depreciation on international trade and investment.

Understand purchasing-power parity and how it affects international price comparisons.

Analyze the factors influencing a country's export, import, and trade balance.

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Definitions:

Offer Price

The price at which a seller is willing to sell a security or commodity.

Government Bonds

Are debt securities issued by a government to support its spending, typically considered a low-risk investment.

Interest Rate

The proportion of a loan charged as interest to the borrower, typically expressed as an annual percentage of the loan amount.

Bond Worth

The current market value of a bond, reflecting investor perceptions of the issuer's creditworthiness and prevailing interest rates.