The trading-triangle concept is used to indicate a nation's
A) exports, marginal rate of transformation, and terms of trade.
B) imports, terms of trade, and marginal rate of transformation.
C) marginal rate of transformation, imports, and exports.
D) terms of trade, exports, and imports.

Question

Quizplus · Accepted Answer

The trading-triangle concept is a framework that shows the relationships between a country's exports, imports, and terms of trade. A country's exports and imports determine their terms of trade, which is the ratio of the price of their exports to the price of their imports. Therefore, the best choice is D, which includes terms of trade, exports, and imports.

The Trading-Triangle Concept Is Used to Indicate a Nation's