-Refer to Exhibit 34-1

question 10

Multiple Choice

-Refer to Exhibit 34-1.Considering the data,which of the following terms of trade would both countries agree to?

• A) 1 unit of Y for 1 unit of X
• B) 1 unit of Y for 0.75 units of X
• C) 1 unit of Y for 0.25 units of X
• D) 1 unit of Y for 1.50 units of X
• E) all of the above

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Definitions:

Services Trade

The exchange of services between countries, including sectors such as finance, insurance, transport, and tourism.

Goods Trade

The act of buying, selling, or exchanging tangible products between countries or within a country.

Balance of Payments Deficit

A situation where a country's total international payments exceed its total international receipts over a specified period, indicating more money flowing out than coming in.

Flexible Exchange Rates

A currency system where the value of a currency is allowed to fluctuate according to the foreign exchange market.