Predict what each of the following events would do to the terms of trade of the importing country and the exporting country, other things being equal. a. A blight destroys a large part of the coffee beans produced in the world. There will be favourable change in the terms of trade of coffee exporters, unfavourable change for coffee importers. b. The Koreans cut the price of the steel they sell to Canada. There will be favourable change in the terms of trade for Canada and unfavourable change in the terms of trade for Korea. c. General inflation of 4 percent occurs around the world. There will be unpredictable change in the terms of trade for the importing country and unpredictable change in the terms of trade for the exporting country.

Predict what each of the following events would do to the terms of trade of the importing country and the exporting country, other things being equal. a. A blight destroys a large part of the coffee beans produced in the world. There will be favourable change in the terms of trade of coffee exporters, unfavourable change for coffee importers. b. The Koreans cut the price of the steel they sell to Canada. There will be favourable change in the terms of trade for Canada and unfavourable change in the terms of trade for Korea. c. General inflation of 4 percent occurs around the world. There will be unpredictable change in the terms of trade for the importing country and unpredictable change in the terms of trade for the exporting country.

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 1QCMC

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