Which of the theories of comparative advantage could explain why the United States exports computers to Japan at the same time that it imports computers from Japan? Explain. Developing countries have complained that the terms of trade they face are unfavorable. If they voluntarily engage in international trade, what do you suppose they mean by ‘‘unfavorable terms of trade’’? If two countries reach equilibrium in their domestic markets at the same price, what can be said about their export supply and import demand curves and about the international trade equilibrium?
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