Why should I choose AnalystNotes?
AnalystNotes specializes in helping candidates pass. Period.
Basic Question 10 of 15
Equilibrium in international trade occurs where the ______
B. import demand curve intersects the total (domestic plus export) supply curve.
C. import supply curve intersects the export demand curve.
A. total (domestic plus import) demand curve intersects the total (domestic plus import) supply curve.
B. import demand curve intersects the total (domestic plus export) supply curve.
C. import supply curve intersects the export demand curve.
User Contributed Comments 7
| User | Comment |
|---|---|
| 6210 | why not A? |
| jerylewis | demand (import) meets supply (domestic + export) |
| tany | "with free international trade, the price (terms of trade) is determined where the export supply curve intersects the import demand curve"(quote from CFA readings) |
| aravinda | I am not sure if my understanding of this practically is correct...I think if a country A needs to supply 100,000 units of food every day to support its consumption...but due to the comparative advantage, lets say Country A now produce only 80,000 units of food ...and in turn it produces more of clothing and exports them. But note that country A needs the remaining 20,000 units of food which it will import (demand for 20,000 units of food in the international market) so that there is equilibrium between the demand-supply of food in Country A...I think this is why " the import demand curve intersects the (domestic + export) supply curve |
| StJohnDale | Not sure I understand this question? |
| jonan203 | read it carefully A: domesic plus import demand curve, implies domestic demand curve PLUS import demand curve you cannot add domestic demand to import demand which is why choice A is incorrect for this particular question |
| tq99999 | good explanation Tany thank u |
I was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.
Martin Rockenfeldt
Learning Outcome Statements
describe the benefits and costs of international trade
CFA® 2024 Level I Curriculum, Volume 1, Module 6.