What are the three types of gains from international transactions ...

[Mollykgkg]

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]

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

[Mollykgkg]

Gracias!

[amit]

Thanks for the timely response, appreciate it