The Higher Price of Imported Products Due to Trade Barriers

question 32

Multiple Choice

The higher price of imported products due to trade barriers causes some consumers to shift their purchases to a domestically-produced product which is now:

• A) Lower in price because import competition has risen
• B) Higher in price because import competition has risen
• C) Higher in price because import competition has declined
• D) Lower in price because import competition has declined

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Definitions:

Compounded semi-annually

Accumulation method for interest where the interest is applied to the principal twice a year, thereby influencing the total amount of interest earned or paid.

Rate of inflation

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

Purchasing power

The worth of a currency measured by how many goods or services one unit of it can purchase.

Perpetual fund

A type of investment fund with no fixed termination date, allowing investors to contribute and withdraw capital indefinitely.