In Two-Good,one-Period Model,when the Terms of Trade Move Against You

question 48

Multiple Choice

In two-good,one-period model,when the terms of trade move against you,

• A) production of good a increases and consumption of good a decreases.
• B) production of good a increases and consumption of good a is ambiguous.
• C) production of good b increases and consumption of good a decreases.
• D) production of good b decreases and consumption of good a increases.
• E) production of good a is ambiguous and consumption of good a increases.