Author Question: What are the three types of gains from international transactions between the residents of different ... (Read 124 times)

Mollykgkg · **on:** Jun 30, 2018

What are the three types of gains from international transactions between the residents of different countries?

What will be an ideal response?

Question 2

For main industrial countries such as Japan and the U.S.

A) there is much less month-to-month variability of the exchange rate, suggesting that price levels are relatively sticky in the short run.
B) there is much more month-to-month variability of the exchange rate, suggesting that price levels are relatively sticky in the short run.
C) there is almost the same month-to-month variability of the exchange rate and price levels.
D) it is hard to tell whether month-to-month variability of the exchange rate is similar to changes in price levels.
E) there is much more month-to-month variability of the exchange rate, suggesting that price levels are relatively sticky in the long run.

SVictor · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

The three types are:
(1 ) Gains due to comparative advantage and economies of scale.
(2 ) Gains due to inter-temporal trade, which is the exchange of goods and services for claims to future goods and services, which is for assets.
(3 ) Gains due to trades of assets for assets, such as the exchange of real estate located in London for U.S. Treasury bonds.

Answer to Question 2

B