Asked by Charlesiana Roberts on May 03, 2024
Verified
The world price for a traded product will be between the domestic no-trade prices of the trading nations.
World Price
The international price at which goods are traded between countries, affecting domestic markets.
No-Trade Prices
Prices at which market participants are not willing to trade, indicating either a lack of demand at higher prices or a lack of supply at lower prices.
- Comprehend the fundamental concepts of international trade and their economic impact on countries.
Verified Answer
CV
Caroline VeatchMay 10, 2024
Final Answer :
True
Explanation :
This is known as the law of one price, which states that in the absence of transportation costs and trade barriers, the price of a traded product will be equalized between countries due to arbitrage opportunities. The price will fall somewhere between the two domestic no-trade prices of the countries involved.
Learning Objectives
- Comprehend the fundamental concepts of international trade and their economic impact on countries.
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