Let us assume that we have an open economy, and the world price is higher than the domestic price; this generates exports rather than imports. In this situation, if consumers suddenly prefer to consume more of the good, does the price that they have to pay change or stay the same?

Q: Tariffs and quotas are costly to consumers because    the price of the imported good falls the…

A: A tariff is the tax that is levied on the imported product and import quota refers to the…

Q: If the United States imports more than it exports, it will have a: trade surplus, trade deficit,…

A: The balance of trade (BOT), also known as the trade balance, refers to the disparity between the…

Q: Technological changes in telecommunications have: Select the correct option and explain why its…

A: An increase in efficiency of process or product that would result in an increase in the level of…

Q: Consider a small country that exports steel. Suppose the following graph depicts the domestic demand…

A: DISCLAIMER  “Since you have asked multiple question, we will solve the first THREE question for you…

Q: Suppose Japan is a small rice importer. At the world free trade price, Japan's domestic production…

A: The three different policies that will be able to achieve the policy goal of having domestic rice…

Q: Declining transportation and communication costs in recent decades have enabled many domestic…

A: With the rise of globalization, movement of goods, services has become seamless. MNCs from the…

Q: How will exchange rates change in a country A where prices double year after year in comparison with…

A: The demand and supply for currency in the foreign exchange market determine the exchange rate of a…

Q: If you observed a country with a rapidly growing trade surplus over a period of a year or so,would…

A: While trade deficit is not always harmful for country growth, thus, rapidly growing country in trade…

Q: Using a graph of offer curves, for each of the following, identify the effect of the change listed…

A: This Curve shows us How many quantities of a good are an exporter is willing to exchange in return…

Q: How much of one good exchanges for a unit of another good is known as Balance of Trade Terms of…

A: When countries engage in international trade, they exchange one good for other.

Q: Consider a small country where the domestic market for sandals is described by the following demand…

A: Equilibrium is achieved at the output level where Qs equals Qd.

Q: When China's clothing industry expands, the increase in world supply lowers the world price of…

A: When two countries trade with each other without any barriers, the countries are said to be free…

Q: Industrially advanced countries can help developing countries by discouraging arms sales to DVCs.…

A: Developing countries (DVCs) are those countries which have not yet achieved their true growth…

Q: If the world price of a good is lower than its domestic equilibrium price, the country will:

A: when the domestic price of the good is higher than world price, opening of free trade will result in…

Q: a. Under autarky, the domestic price of rice is  _____ million kg.       The quantity sold…

A: Quantity demanded is the total quantity that the consumer is ready to purchase at different prices.

Q: If the world price for good A is below the domestic price for good A without trade, then consumer…

A: Surplus refers to the amount of an item or resource that is not being used. Surpluses include things…

Q: What is an export supply curve? What is an import demand curve? How do such curves relate to the…

A: Export demand curve: This is an upward sloping curve which represents the goods and services…

Q: “Trade policies determine the size of markets for the output of firms and hence strongly influence…

A: International business is done with the goal of expanding and diversifying commercial activities…

Q: fixes the price of foreign exchange below equilibrium?

A: Foreign exchange: It is the change of one nation's cash into another. In a free economy, a nation's…

Q: Small Island Developing States (SIDS), particularly our Caribbean islands, are normally accused by…

A: Since you have asked multiple questions, we have answered the first question for you. If you want…

Q: For each of the following statements, indicate whether it is true or false for a country that opens…

A: The elasticity of demand refers to the degree of responsiveness in demand when there is a change in…

Q: Suppose supply is given by P = 2Q and demand is given by P = 1000 – 2Q. What will happen in this…

A: Supply : P=2Q Demand : P=1000-2Q Equilibrium price : Demand=Supply 2Q=1000-2Q 4Q=1000 Q=250 P=500…

Q: Consider an economy (with no international trade) in which the price level is constant where C = 500…

A: The equilibrium level of GDP is that point where the AE (aggregate expenditure) which is a straight…

Q: Which of the following would have the greatest positive impact on a country's domestic economy? An…

A: The domestic value of an economy is represented by its gross domestic product which is the aggregate…

Q: Suppose the goods-market in an open economy can be represented by the following equations: Y = a +…

A: In the aggregate expenditure model, equilibrium occurs where aggregate expenditure is equal to…

Q: ) Suppose a small open economy cannot produce consumption goods or output that the government can…

A: Macroeconomics is a sub-part of economics that deals with the production, allocation, and…

Q: Japan generally runs a significant trade surplus.  Do you think this is most related to high foreign…

A: Answer: Correct option: High Japanese saving rate relative to Japanese investment.

Q: Display graphically changes in the value of domestic currency, if a foreign government imposes…

A: Exchange rate refers to the value of one currency in terms of other currency. It is the rate at…

Q: Discuss The import substitution strategy in the context of a country's large trade deficits with key…

A: Import substitution strategy is the strategy which is used to reduce the dependence on the on the…

Q: In 2015, the European Commission proposed giving individual member states the right to ban imports…

A: Genetically Modified Organisms(GMO) are products that have been worked on in laboratories to…

Q: Consider Images A and B, which statement below is correct? a) a. the relative world price of wheat…

A: Free Trade is a policy where the government does not discriminate against imports or interfere with…

Q: Consider the market for meekers in the imaginary economy of Meekertown. In the absence of…

A: Domestic Price = $23 World Price = $25 The domestic price is less than the world price. Hence, under…

Q: A country whose National Saving is greater than its Investment will experience a ) Trade deficit (IM…

A: Trade surplus occurs when exports (X) exceed the imports (IM). Trade deficit occurs when imports…

Q: Should imports to the United States be curtailed by, say 20 percent to eliminate our trade deficit?…

A: The balance of trade refers to exporting and importing and, hence, evaluating the overall economic…

Q: If a country's economic data shows that private savings equal $300 million, government spending…

A: given that, private savings =$300 million government spending = $400 million taxes = $300 trade…

Q: Describe a scenario in which a trade surplus benefits an economy and one in which a trade surplus is…

A: Trade surplus is an economic measure where exports of a country exceed its imports and is a positive…

Q: If China has a trade surplus with the United States, it is a good thing for the U.S economy? True or…

A: Trade surplus means that a country's export is greater than it's import.

Q: If the government implements tariffs and quotas on foreign goods and services, then the U.S. trade…

A: Tariff and Quotas: Tariffs and quotas are different terms by tariffs we mean a certain kind of tax…

Q: If a country is a price taker for a good in the world market, its demand for the good remains the…

A: If a country is a price taker for a good, then it reflects that the country is selling homogenous…

Q: The United States has been able to run international trade deficits, year after year, because

A: Increase in percentage of population that has attended colleges means increase in the general…

Q: Suppose a limited number of WTO member countries consider entering a customs union with zero tariffs…

A: The World Trade Organization is an international institution, created in 1995, to look over the…

Q: Using a graph of offer curves, for each of the following, identify the effect of the change listed…

A: The Offer Curve shows us what quantities of a good are an exporter willing to exchange in return for…