Which terms-of-trade concept emphasizes a nation's capacity to import? Which terms-of-trade concept emphasizes a nation's capacity to import? price terms of trade barter terms of trade income terms of trade commodity terms of trade
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e., how many imports the country can buy with its export receipts. Show more…
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Discuss the importance of terms of trade for countries.
Jennifer S.
Choose the correct option: 1. International trade is guided by the principle that: a) Exports should exceed imports b) Imports should exceed exports c) Resources are more mobile internationally than goods d) Resources are less mobile internationally than goods
Sanchit J.
A) Both countries would want to sell given these terms of trade, so there will be no exchange. B) Country A would want to sell boats, and Country B would want to buy boats. C) Neither country would be willing to sell given these terms of trade because neither country has a comparative advantage in either good. D) Country A would want to buy boats, and Country B would want to sell boats. E) Neither country would be willing to buy or sell boats given these terms of trade because the prices of these goods are not given in money. Country A and Country B are potential trading partners who can produce boats and umbrellas as illustrated in the PPFs below. The x-axis represents the quantity of boats, the y-axis represents the quantity of umbrellas. The red line indicates country A where it can produce 150 boats or 50 umbrellas. The green line indicates country B where it can produce 50 boats or 150 umbrellas. Suppose the terms of trade (relative price) are one boat for one umbrella. Who would want to sell boats based on these terms of trade, and who would want to buy boats based on these terms of trade?
Andrew D.
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