Asked by Lee
How does inflation influence the terms of trade?
Answers
Answered by
economyst
Do a little research, then take a shot, what do you think?
Hint: What would an international trader do if he is buying or selling goods in a country with high expected inflation? What if the inflation rate is expected to be both high and uncertain? (e.g., could be 25%, could be 50%)
Hint: What would an international trader do if he is buying or selling goods in a country with high expected inflation? What if the inflation rate is expected to be both high and uncertain? (e.g., could be 25%, could be 50%)
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