Saturday
October 25, 2014

Homework Help: Int. ECO

Posted by Powers on Wednesday, February 13, 2013 at 2:16am.

1. Suppose just trade determines the strength of a currency. A country imports Good I and exports Good X. Because of international conditions, the price of Good I has risen 25%, while the country’s domestic production of Good I has stayed the same. The price of Good X has stayed the same as has the production level of Good X in the country. Consider the commodity terms of trade and answer the following for the country.
(a) If the quantity of its exports stays the same, what happens to the quantity of its imports?
How does this affect the level of wellbeing (satisfaction/utility) in the country? Why?
(b) If the quantity of its imports stays the same, what happens to the quantity of its exports?
How does this affect the level of wellbeing (satisfaction/utility) in the country? Why?

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

Economics - Based on the total world trade share with the given information, ...
econ - I asked this question couple days before. Exporters suffer when their ...
eco - Good X and good Y are substitutes. If the price of good Y increases, then ...
international trade - Suppose when Russia opens to trade, it imports automobiles...
Social studies - Exchange rates are determined by _____________. a. the presence...
INTERNATIONAL BUSINESS - Do a country's imports completely measure the market ...
Literacy - In global trade, when the difference between money coming into a ...
Business management class - In global trade, when the difference between money ...
economic - Show graphically and explain how a policy that increases the ...
Econ - In which of the following circumstances would a buyer be indifferent ...

Search
Members