Author Question: The U.S.Colombia Trade Promotion Agreement was signed on November 22, 2006, in Washington, D.C. This ... (Read 59 times)

kfurse · **on:** Jun 29, 2018

The U.S.Colombia Trade Promotion Agreement was signed on November 22, 2006, in Washington, D.C. This comprehensive trade agreement eliminated tariffs and other barriers to goods and services.

Colombia will immediately eliminate tariffs on wheat, barley, peanuts, and many other products in which Columbia does not have a comparative advantage. This policy means that the price of peanuts in Columbia will become A) equal to the free trade price.
B) lower than the free trade price.
C) higher than the price when a tariff was in place.
D) higher than the free trade price.

Question 2

Suppose the economy is at point B. If a recession in another country decreases exports, to what point might economy move in the short run?

A) It stays at point B.
B) It shifts to a point such as A.
C) It shifts to a point such as C.
D) None of the above answers are correct because it is the SAS curve that shifts, not the AD curve.