Standard Model Of Trade Flashcards
Standard Model Of trade is also known as
Paul Krugman- Maurice Obstfeld model
The exchange rate or the rapport between the export prices and import prices.
Equilibrium
Amount of money, which subjects (consumers) of an economy plan to spend on goods and services at the different size of income or at given prices I’m a given period.
Global Demand
Measure of a nation’s total trade
Net export
The intersection of the global demand curve and the global supply curve.
Market Equilibrium
The size of purchases made by consumers influences prices
Aggregate Demand Curve
Aka. Quantity supplied-function of price. Represent the relationship between price and quantity supplied.
Supply curve
Price of a product or service compared to another. It’s expressed as a ratio between the prices of two products or services.
Relative Prices
States that if all other factors remain equal, the higher the price of a good, fewer people will demand that good. The higher the price, the lower the quantity demand
Law of Demand
The price of a country’s exports divided by the price of its imports on a nation’s welfare
Terms of trade
Factors affecting Terms of Trade
Scarcity
Size and quality of good
Reciprocal Demad
Taste of consumers in a country
Economic growth
Tariff
Lines along which the market value of output is constant
Isovalue lines
