Suppose a new EU member begins substituting its imports from non-EU members to other EU members. This is an example of
A) trade diversion.
B) trade deflection.
C) free trade.
D) trade detection.
Answer: A) trade diversion.
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During 1990, a Hershey candy bar cost $.85. By 2007, the same Hershey candy bar cost $1.25. If the CPI was 130.7 in 1990 and 180.5 in 2007, the price of the 1990 Hershey candy bar in 2007 prices is
A) greater than the price of the 2007 Hershey candy bar. B) less than the price of the 2007 Hershey candy bar. C) equivalent to the price of the 2007 Hershey candy bar. D) perhaps greater than, perhaps less, or perhaps the same depending on whether the CPI in 2007 has been adjusted to reflect 2007 prices. E) not able to be determined given the information in the question.
How does a weak financial sector intensify the problems created by volatile capital flows?
What will be an ideal response?
Assume the graph shown represents the market for bottles of wine and was originally in equilibrium with D and S. Something changes and demand shifts to D2. Which of the following is true?
A. Equilibrium quantity increased by 20. B. Equilibrium price increased by $5. C. Equilibrium quantity increased by 30. D. Equilibrium price increased by $15.
When the supply of Swiss cheese decreases while the demand for Swiss cheese increases, the equilibrium ________ of Swiss cheese will definitely ________, ceteris paribus.
A. price; increase B. price; decrease C. quantity; increase D. quantity; decrease