Suppose the production possibilities for two countries, producing either food or clothing, are shown in the above figure. They can each produce any linear combination as well. Once free trade is allowed, Canada will produce

When supply falls and demand remains the same, equilibrium price _______ and equilibrium quantity __________.

Fill in the blank(s) with the appropriate word(s).

The annual volume of foreign exchange transactions:

A. is more than 18 times larger than world GDP. B. is one-eighth the world GDP. C. is three times the world trade volume. D. is small relative to most financial markets.