When There Is No Trade Between Econostan and Macroland, the Price

question 56

Multiple Choice

When there is no trade between Econostan and Macroland, the price of orange juice is $1 per cup in Econostan and $0.50 in Macroland, while the price of shoes is $40 per pair in Econostan and $45 per pair in Macroland at current exchange rates. Assuming there is no change in exchange rates, which result could be expected regarding terms of trade if trade opened up between the two countries?

• A) The price of juice will fall and the price of shoes will rise in Econostan.
• B) The price of both juice and shoes will fall in Econostan.
• C) The price of juice will rise and the price of shoes will rise in Macroland.
• D) The price of shoes will fall and the price of juice will rise in Econostan.

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Definitions:

Cross-sectional

A type of observational study that analyzes data from a population, or a representative subset, at one specific point in time.

Longitudinal

A type of study or research design that follows subjects over a period of time, gathering data at multiple intervals to observe changes and developments.

Developmentally Delayed

A condition where a child does not reach their developmental milestones at the expected times, potentially indicating the need for intervention.

Early Onset Dementia

A term referring to dementia that appears before the age of 65, often resulting in significant changes in memory, thinking, behavior, and the ability to perform everyday activities.