In Attempting to Determine Whether a Developing Country's Export Price

Multiple Choice

In attempting to determine whether a developing country's export price instability is caused by shifts in world demand for the country's exports or by shifts in the supply curve of the country's exports (along with corresponding shifts in the supply curves of competing exporters) , a general rule is that, other things equal, if the demand curve is doing the shifting, then price and quantity will move __________; in addition, if the supply curve is shifting along a given demand curve, then, other things equal, price and quantity __________.

A) directly with each other (i.e., when price rises, quantity rises, and when price falls, quantity falls) ; will move inversely with each other (i.e., when price rises, quantity falls, and when price falls, quantity rises)
B) directly with each other (i.e., when price rises, quantity rises, and when price falls, quantity falls) ; also will move directly with each other
C) inversely with each other (i.e., when price rises, quantity falls, and when price falls, quantity rises) ; will move directly with each other (i.e., when price rises, quantity rises, and when price falls, quantity falls)
D) inversely with each other (i.e., when price rises, quantity falls, and when price falls, quantity rises) ; also will move inversely with each other