Question

assume us domestic exchange rate is one is to 1:1.5 and UK store mestic exchange rate is one is 1:2.5 in international trade if both countries get equal gain the term of trade must be​

Answer 1

Answer:

The re ciprocal of 1/b is

Answer 2

Term of Trade$=\frac{Price\;of\;Exports}{Price\;of\;Imports}\times100\;$

Explanation:

• Terms of trade (TOT) is the ratio between any country's export prices and import prices.
• It is obtained by dividing the price of the exports by imports and multiplying it by 100.
• Term of Trade$=\frac{Price\;of\;Exports}{Price\;of\;Imports}\times100\;$
• An exchange rate is the ratio of a nation's currency to the currency of another nation.

Since the gain is equal but domestic exchange rate is different for the nations in international trade (US>UK), the term of trade of UK is more than that of US.