The international relative price and total quantity of a traded good or service is determined by:
A) labor shortages that occur worldwide.
B) the World Trade Organization.
C) the intersection of the total world import demand curve with the total world export supply curve.
D) natural resource availability compared with the industrial demand for those products.

Question

Quizplus · Accepted Answer

The international relative price and total quantity of a traded good or service is determined by the intersection of the total world import demand curve with the total world export supply curve. This intersection determines the equilibrium point where the price and quantity match the desires of both importers and exporters. Labor shortages, the World Trade Organization, and natural resource availability may impact the supply and demand factors that influence this intersection but they do not directly determine the price and quantity of the traded good or service.

The International Relative Price and Total Quantity of a Traded