Asked by Angie Rivera on Jun 23, 2024
Verified
If the domestic price is below the world price of a certain product, the domestic country will export the product.
Domestic Price
The price of goods or services within a country's borders, as opposed to international or foreign prices.
World Price
The international market price of a good or service, determined by global supply and demand, that influences local market prices and trade policies.
Export
The process of selling goods or services produced in one country to other countries.
- Understand the concept of terms of trade and its importance in international exchanges.
Verified Answer
JC
jeniffer ChavezJun 26, 2024
Final Answer :
True
Explanation :
When the domestic price of a product is below the world price, it means the domestic country can produce the product more cheaply than it is sold for on the world market, making it profitable for the country to export the product.
Learning Objectives
- Understand the concept of terms of trade and its importance in international exchanges.