In Order for Mutually Beneficial Trade to Occur,what Level Must

question 27

Multiple Choice

In order for mutually beneficial trade to occur,what level must the exchange rate between the goods involved be set at?

• A)at a level where each country can export a good at a price above the opportunity cost of producing the good in the domestic market
• B)at a level where each country will specialize in the production of those goods in which it has an absolute advantage
• C)at a level where the exchange ratio is exactly equal to the opportunity cost of producing the good in each country
• D)at a level where each country can import a good at a price above the opportunity cost of producing the good in the domestic market

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