Case Interview Prep

Category - Economics

Germany exports wheat products to countries all over the world. Germans will wish to purchase German wheat when the domestic price matches the lower ____________.
  1. world price
  2. interest rate
  3. exchange price
  4. loanable fund
Explanation
Answer: A - Germans will wish to purchase German wheat when the domestic price matches the lower world price.

Key Takeaway: Domestic consumers of an exportable good will be interested in purchasing those goods at the most competitive prices. If the world price is lower than the domestic price, domestic consumers will wish to purchase their goods at the lower world price.
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