Asked by Logan Robinson on Apr 26, 2024
Verified
Without free trade, the domestic price of a good must be equal to the world price of a good.
Domestic Price
The price of a good or service within a country’s borders, which can differ from its price in the international market due to tariffs, taxes, and supply and demand conditions.
World Price
The global market price at which goods and services are bought and sold, influencing international trade dynamics.
- Gain an insight into the notion of world price and its relevance to global trade transactions.
Verified Answer
AH
Arianna HudsonApr 30, 2024
Final Answer :
False
Explanation :
Without free trade, the domestic price of a good can differ from the world price due to tariffs, quotas, and other trade barriers that affect supply and demand within the domestic market.
Learning Objectives
- Gain an insight into the notion of world price and its relevance to global trade transactions.