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Unformatted text preview: e. Trade offers the benefits of specialization III. What makes international economics different? a. Exchange rates b. Commercial policies i. Government restrictions upon international transactions c. Different domestic policies d. Relative immobility of factors of production i. Factors of production are more mobile domestically than internationally e. Marketing considerations f. Statistical data IV.Why do nations trade a. Nations are not equally suited to produce all goods either because they are differently endowed or for other reasons i. All would benefit if each specialized in what it could do best and obtain its other needs through exchange V. Demand considerations a. Supply conditions determine the limits to beneficial trade b. the exchange ratio is determined by each countries’ relative intensity of demand for the other’s products...
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This note was uploaded on 04/19/2011 for the course BUS 256 taught by Professor Several during the Fall '09 term at Indiana.
- Fall '09
- Opportunity Cost