If Wheat Farmers Have a Good Year, with Higher Than

question 3

Multiple Choice

If wheat farmers have a good year, with higher than expected yields, ceteris paribus, then:

• A) the price of wheat will increase
• B) the price of wheat will decrease
• C) it just depends on the price of corn
• D) not enough information to answer

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Definitions:

GATT

The General Agreement on Tariffs and Trade, an international treaty designed to promote international trade by reducing or eliminating trade barriers such as tariffs.

North American

Pertaining to or relating to the continent that comprises Canada, the United States, Mexico, and the countries of Central America.

Trade Agreement

A contract between nations regarding their trade relationships, including terms on tariffs, trade restrictions, and other aspects of international trade.

Tariffs

Taxes imposed by a government on imported goods, often used to protect domestic industries or retaliate in trade disputes.