If the demand for traded goods is price-inelastic, the price-specie-flow mechanism will Result in
A) gold movements between countries that remove trade deficits and surpluses.
B) gold movements between countries that worsen trade deficits and surpluses.
C) negligible movements of gold between countries and hence little or no adjustment of Trade deficits and surpluses.
D) a removal of the basis for trade between countries.
Correct Answer:
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Q1: During the price-specie-flow adjustment process to a
Q2: David Hume's price-specie-flow mechanism
A) reinforced the Mercantilist
Q3: Two important assumptions contained in David Hume's
Q5: Explain what is meant by a zero-sum
Q6: Why was a positive trade balance so
Q7: (a) Why did the Mercantilists think
Q8: The price-specie-flow mechanism suggested that
A) a country
Q9: In Adam Smith's view, international trade
A) benefited
Q10: In David Hume's price-specie-flow doctrine or adjustment
Q11: Explain how the price-specie-flow mechanism operates to
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