CFA Practice Question

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CFA Practice Question

Import restrictions on pepper would ______
A. decrease the demand for pepper.
B. increase the market price for pepper.
C. at first increase the supply of pepper.
Explanation: An import restriction decreases the supply (leftward shift of the supply curve) of the good being restricted.

User Contributed Comments 1

User Comment
cbb1 "A" is wrong because the demand curve has not shifted, just the quantity demanded (i.e., movement along the same demand line)
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