The price of domestically produced wine in the United States is $15 per liter and the price of the same wine produced in Italy is 12 euros per liter.If the exchange rate is $.96 to the euro and no tariffs or quotas affect the good
A) the United States will export wine and the U.S. price of wine will rise.
B) the United States will import wine and the U.S. price of wine will rise.
C) Italy will export wine and the Italian price of wine will rise.
D) Italy will import wine and the Italian price of wine will rise.
E) both countries will produce their own wine and no trade will occur.
Correct Answer:
Verified
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A)
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A) a tariff on exports.
B)
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