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Essay

Trade

Essay specific features

 

Issue:

Business

 

Written by:

David S

 

Date added:

September 17, 2015

 

Level:

University

 

Grade:

A

 

No of pages / words:

2 / 320

 

Was viewed:

4768 times

 

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Essay content:

It normally arises from an abundance of a particular factor resource, e.g. France is good at wine because of its abundance in productive land and climate. For example, the production possibilities of 2 countries are as follows: Country Wheat Cloth A 2 1 B 4 8 Assume, pre-trade exchange ratio of wheat for cloth are Country A: 2 wheat for 1 cloth Country B: 1 wheat for 2 cloth Country A gains by exporting wheat and importing cloth...
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Country B gains by exporting cloth and importing wheat. Thus both countries have gained from trade. Gains of trade between the 2 countries need not be equal as it depends on the relative prices of wheat and cloth after trade takes place. Terms of trade is defined as the price index of exports divided by the price index of imports and expressed as a percentage (Sloman and Hinde 2007)...
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