An Increase in Income

question 11

Multiple Choice

An increase in income

• A)increases the demand for turnips if a turnip is an inferior good.
• B)increases the demand for turnips if a turnip is a normal good.
• C)increases the supply of turnips.
• D)decreases the demand for turnips if turnips have a very low price.
• E)decreases the supply of turnips.

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Definitions:

International Trade

The exchange of goods and services between countries, driven by comparative advantages.

World Trade Organization

An international organization that regulates trade between nations to ensure that trade flows as smoothly, predictably, and freely as possible.

International Trade Agreements

Treaties in which a country promises to engage in less trade protection against the exports of other countries in return for a promise by other countries to do the same for its own exports.

Autarky

An economic condition or system in which a country is self-sufficient and does not engage in international trade.