- CFA Exams
- CFA Level I Exam
- Study Session 5. Economics (2)
- Reading 17. International Trade and Capital Flows
- Subject 3. International Trade Restrictions and Agreements
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) |