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8 Aug 2019
Mark the correct answer and explain why an asymmetric shift in demand away from country A to a trading partner country B will lead to inflationary tendencies in country B when there is (a) high, or (b) low labour mobility.
Mark the correct answer and explain why an asymmetric shift in demand away from country A to a trading partner country B will lead to inflationary tendencies in country B when there is (a) high, or (b) low labour mobility.
Patrina SchowalterLv2
10 Aug 2019
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Related questions
Suppose with all of their resources, the quantities of MP3 players or mobile phones produced by countries A and B are as follows:
| country | Smartphones(units) | MP3 players(units) |
| A | 500 | 350 |
| B | 550 | 450 |
(a)Which country has an absolute advantage in the production of MP3 players?
(b)Suppose the terms of trade is 1.35 units of smartphones for 1 unit of MP3. Calculate the gain to Countries A & B from trading MP3 respectively.
(c)suppose Country C offers new terms of trade which are 1 unit or smartphones for 1 unit of MP3. Which country will trade MP3 with Country C? explain your answer.
