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

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations.

Budget

Company’s plan for how it will raise and spend money during a given period of time.

Asset Turnover Ratio

A financial metric that measures the efficiency of a company at using its assets to generate revenue or sales.

Return On Equity

A financial ratio that measures the amount of net income returned as a percentage of shareholders' equity, indicating the profitability of a company relative to owner's investments.