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Author Question: Starting from a situation where country A which exports good S and imports good T has a larger trade ... (Read 72 times)

audie

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on: Jun 30, 2018
Starting from a situation where country A which exports good S and imports good T has a larger trade triangle than country B, explain how the process of reciprocal demand leads to international trade equilibrium.
 
  What will be an ideal response?

Question 2

The founding document of the European Economic Community, and the document that continues to provide the basis for the European Union is the
 
  A) Treaty of Brussels.
  B) Delors Report.
  C) Treaty of Rome.
  D) Single European Treaty.
  E) Maastricht Treaty.


sailorcrescent

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Reply #1 on: Jun 30, 2018
Answer to Question 1

If A has a larger trade triangle than B it wants to trade more than B. Consider the S market. A's desired exports exceed B's desired imports. The price of S must fall. As this occurs, the two trade triangles move toward congruency.

Answer to Question 2

C


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