The Limits of the Terms of Trade Between Two Countries

question 109

True/False

The limits of the terms of trade between two countries are determined by those countries' opportunity costs of production.

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Definitions:

Explanation

A statement or account that makes something clear by describing it in more detail or revealing relevant facts.

Positive Statement

A factual assertion that can be tested or verified, often used in economics to describe how the world is, as opposed to how it should be.

Indirect Approach

A communication method where the main point or message is not directly stated at the beginning, often used in writing or speech to build suspense or be polite.

Buffer Statement

A neutral or positive statement used to cushion the impact of a negative message or bad news in communication.