Suppose a Country,whose Production and Consumption of Coffee Is Large

question 20

Multiple Choice

Suppose a country,whose production and consumption of coffee is large relative to the world market,has just entered the global market.If the country is a net exporter of coffee,we would expect:

• A) an increase in both world price and quantity of coffee.
• B) an increase in world price and decrease in world quantity of coffee.
• C) a decrease in both world price and quantity of coffee.
• D) a decrease in world price, and increase in world quantity of coffee.

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Definitions:

Alternative Situations

Different scenarios or conditions that could occur, often considered when planning or making decisions.

Uncertainty

The lack of complete certainty, that is, the existence of more than one possibility in the outcome of a future event.

Econometric

Relating to econometrics, the branch of economics that applies statistical and mathematical methods to analyze economic data and test theories.

Prime Interest Rate

The interest rate that commercial banks charge their most creditworthy customers, often used as a benchmark in the economy.