Reciprocal demand suggests that the actual international exchange ratio at which trade takes place depends on the trading partners interacting demands.

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Reciprocal demand refers to the concept in international trade theory that the terms of trade between two countries are determined by the relative demand each country has for the other's goods. This means that the exchange rate at which goods are traded internationally is influenced by how much each country wants the other's products, in addition to their respective supply capabilities.

Reciprocal Demand Suggests That the Actual International Exchange Ratio at Which