If there is an outward shift in U.S. demand for French goods, the result will be
A) a decrease in the dollar price of a euro.
B) an inward shift in French demand for U.S. goods.
C) a decrease in euros traded.
D) an increase in the dollar price of a euro.
D
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Technical and organizational change
A) typically reduces prices by increasing the supply of the product, ceteris paribus. B) typically reduces prices by decreasing the demand for the product, ceteris paribus. C) typically increases prices by increasing the demand for the product, ceteris paribus. D) typically increases prices by decreasing the supply for the product, ceteris paribus.
Trade diversion reduces worldwide efficiency, because:
a. production is diverted to the country with comparative advantage. b. production is diverted away from the country with comparative advantage. c. unnecessary trade restrictions are created in the economies. d. consumption is diverted to the country having inadequate demand. e. the cost of transhipment of the goods increases thus raising their prices in the world market.