Question

inelastic reciprocal demand means favourable terms of trade of a country . write true or false​

Answer 1

The statement is True.

• The demand which is reciprocal expresses the relative intensity and elasticity of demand for each other's commodities in specific rules of both the trading nation's own commodities.

• Any change in such a demand will typically lead to the real exchange ratio to fluctuate.

• The more inelastic the country's offer curve is naturally, the better the possible phases of lucrative trade would be for the nation, inversely.