In the Following Offer Curve Diagram

question 7

Multiple Choice

In the following offer curve diagram,

If, starting from the initial equilibrium point E, countries A and B both increase their Demand for computers, then country A's terms of trade will __________ and the volume of A's exports will __________.

• A) improve; fall
• B) improve; rise, fall, or stay the same (cannot be determined without more Information)
• C) deteriorate; rise
• D) improve, deteriorate, or stay the same (cannot be determined without more Information); rise