If the United States Starts to Import a Good That

question 73

Multiple Choice

If the United States starts to import a good that had previously been produced in the United States,the market price of the good in the United States

• A) rises.
• B) falls.
• C) remains constant.
• D) either remains constant or rises, depending on how whether the supply of the good stays the same or increases.
• E) There is not enough information to answer the question because we need to know if the market price in the United States had been above or below the world market price before trade began.

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Definitions:

Asset Account

An account that records entries for tangible or intangible items that hold value for an entity, such as cash, inventory, property, and equipment.

Expense Account

An account that tracks the costs incurred by a company in the process of earning revenue.

Liability Account

An accounting record that captures the amounts owed by a business to others, representing its debts or obligations.

Double-Entry System

An accounting system that records each transaction twice, as debits in one account and credits in another, to ensure the accounting equation remains balanced.