The distinction between international trade and international money is not entirely clear because
A) real developments in the trade accounts do not have monetary implications.
B) the balance of payments includes only real measures.
C) developments caused by purely monetary changes have no real effects.
D) trade models focus on real, or barter relationships.
E) most international trade involves monetary transactions.

Question

Quizplus · Accepted Answer

Most international trade involves monetary transactions, such as the exchange of currencies to pay for goods or services. Therefore, there is a close relationship between international trade and international money. However, it is important to note that international trade models often focus on real, or barter relationships, and not just monetary flows. Additionally, developments in the trade accounts can have monetary implications, such as affecting exchange rates and capital flows.

The Distinction Between International Trade and International Money Is Not