How does reciprocal demand affect the terms of trade of a country?
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The terms of trade of a country depend upon reciprocal demand, i.e. “the strength and elasticity of each country's demand for the other country's product”. ... The point A where the two offer curves intersect each other is the equilibrium point at which ОС of cloth is traded by England for OL linen of Germany.
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The demand of two persons or communities for one another's product.
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