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Chapter 32: Q. dFCT (page 722)

Why was it more efficient to end the quota? (Hint: Why do you think that people usually accept money in exchanges instead of engaging in barter of one good for another every time they trade?)

Short Answer

Expert verified

That is the old haggling practice that traces back just before emergence of the appreciating asset.

Step by step solution

01

Introduction

Barter is the transfer of goods and services involving multiple people without the need for payment or a currency channel like it really is a checking account.. In short, exchanging comprises one side supplying one service or product in consideration for just another party offering that commodity.

02

Given Information

Consumers and companies purchase commodities based on initial value and evaluations.

03

Explanation

Bartering is predicated on a simple concept: multiple individuals agree the market merits of various services and goods but then just transfer those inside of an implied contract.

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Most popular questions from this chapter

Suppose that the two nations in Problems 32-1and 32-2choose to specialize in producing the goods for which they have a comparative advantage. They agree to trade at a rate of exchange of 1pastry for 1 sandwich. At this rate of exchange, what are the maximum possible numbers of pastries and sandwiches that they could agree to trade?

Critics of the North American Free Trade Agreement (NAFTA) suggest that much of the increase in exports from Mexico to the United States now involves goods that Mexico otherwise would have exported to other nations. Mexican firms choose to export the goods to the United States, the critics argue, solely because the items receive preferential treatment under NAFTA tariff rules. What term describes what these critics are claiming is occurring with regard to U.S.-Mexican trade as a result of NAFTA? Explain your reasoning.

Suppose that the two nations in Problem 32-4 decide to specialize in producing the good for which they have a comparative advantage and to engage in trade. Would residents of both nations find a rate of exchange of 4 bottles of wine for 1 digital TV potentially agreeable? Why or why not?

To answer Problems 32-7 and 32-8, refer to the following table, which shows possible combinations of hourly outputs of modems and flash memory drives in South Shore and neighboring East Isle, in which opportunity costs of producing both products are constant.

Describe ways that nations restrict foreign trade.

Identify key international agreements and organizations that adjudicate trade disputes among nations.
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