This Graph Demonstrates the Domestic Demand and Supply for a Good,as

question 47

Multiple Choice

This graph demonstrates the domestic demand and supply for a good,as well as the world price for that good. According to the graph shown,if this economy were open to free trade,it would:

• A) import this good because the domestic price is greater than the world price.
• B) export this good because the domestic price is greater than the world price.
• C) import this good because the world price is greater than the domestic price.
• D) export this good because the world price is greater than the domestic price.

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Definitions:

CPI

Stands for Consumer Price Index, a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care.

US$

The United States Dollar, the official currency of the United States, represented as USD.

Euro

The official currency of 19 of the 27 European Union countries, which together make up the Eurozone.

Buying Power

The capacity of an individual or company to purchase goods and services, often related to the amount of money available.