Figure 9-6 -When a Country That Imported a Particular Good Abandons a Good

question 99

Multiple Choice

Figure 9-6
-When a country that imported a particular good abandons a free-trade policy and adopts a no-trade policy,

• A)consumer surplus increases and total surplus increases in the market for that good.
• B)consumer surplus increases and total surplus decreases in the market for that good.
• C)consumer surplus decreases and total surplus increases in the market for that good.
• D)consumer surplus decreases and total surplus decreases in the market for that good.

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Definitions:

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Cash Outflow

Payments or expenditures of cash, representing the movement of cash out of a business for expenses, investments, or acquisitions.

Discount Rate

The interest rate used to discount future cash flows to their present value, often used in capital budgeting and investment planning.

Original Investment

The initial amount of money used to purchase an asset or start an investment.