The international relative price and total quantity of a traded good or
Service is determined by:
A)labor shortages that occur worldwide.
B)the World Trade Organization.
C)the intersection of the total world import demand curve with the total world export supply curve.
D)natural resource availability compared with the industrial demand for those products.

Question

Quizplus · Accepted Answer

The international relative price and total quantity of a traded good or service is determined by the intersection of the total world import demand curve with the total world export supply curve. This is because the price and quantity of a good or service in the global market is determined by the interaction of the buying (importing) and selling (exporting) decisions of all countries involved in the trade. The market equilibrium is achieved at the point where the total quantity demanded of the good or service by all importing countries equals the total quantity supplied by all exporting countries, at a price that reflects the willingness to pay of the buyers and the willingness to sell of the sellers.

The International Relative Price and Total Quantity of a Traded