-Refer to Exhibit 34-1.Considering the data,which of the following terms of trade would both countries agree to?
A) 1 unit of Y for 1 unit of X
B) 1 unit of Y for 0.75 units of X
C) 1 unit of Y for 0.25 units of X
D) 1 unit of Y for 1.50 units of X
E) all of the above

Question

-Refer to Exhibit 34-1.Considering the data,which of the following terms of trade would both countries agree to?
A) 1 unit of Y for 1 unit of X 
B) 1 unit of Y for 0.75 units of X 
C) 1 unit of Y for 0.25 units of X 
D) 1 unit of Y for 1.50 units of X 
E) all of the above

Quizplus · Accepted Answer

The terms of trade must be mutually beneficial, falling between the opportunity costs of both countries.