theory of reciprocal demand
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According to him, the actual ratio at which commodities are transacted between two countries depends crucially upon the strength and elasticity of each country's demand for the product of the other or the reciprocal demand. ...
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Mill propounded the theory of reciprocal demand or the law of international values to explain the actual determination of equilibrium terms of trade. ... Reciprocal demand means the relative strength and elasticity of demand of the two trading countries for each other's product in terms of their own product.
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