Starting from a Situation Where Country a Which Exports Good

question 13

Essay

Starting from a situation where country A which exports good S and imports good T has a larger trade triangle than country B,explain how the process of reciprocal demand leads to international trade equilibrium.

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Definitions:

Machine-Hours

A measure of production output or work using machines, calculated as the number of machines used multiplied by the hours they operate.

Fixed Overhead Budget Variance

The difference between the actual fixed overhead costs incurred and the budgeted fixed overhead costs.

Predetermined Fixed Manufacturing Overhead Rate

A rate used to allocate fixed manufacturing overhead to products based on a predetermined activity level.

Fixed Manufacturing Overhead Budget Variance

The difference between the actual fixed manufacturing overhead costs and the budgeted fixed overhead costs.