In a two by two model of international trade, it is assumed that
ECONOMICS
JAMB 2023
In a two by two model of international trade, it is assumed that
- A. both countries could gain from trade at the same time, but term of trade is inconsequential for the distribution of the gains
- B. both countries could gain from trade at the same time, but the volume of the gains depends on terms of trade
- C. neither country could ever gain from trade since term of trade is depends on the distribution of the gains from trade
- D. both countries could gain from trade at the same time, and the volume of the gains does not depend on terms of trade
Correct Answer: B. both countries could gain from trade at the same time, but the volume of the gains depends on terms of trade
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