The terms of tradethe rate at which goods are exchangedare subject to the forces of international supply

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The terms of trade—the rate at which goods are exchanged—are subject to the forces of international supply and demand. The terms of trade will lie somewhere between the opportunity costs of the trading partners. The terms of trade determine how the gains from trade are shared.

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The Micro Economy Today

ISBN: 9781259291814

14th Edition

Authors: Bradley Schiller, Karen Gebhardt

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