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In Two-Good,one-Period Model,when the Terms of Trade Move Against You

Question 48

Multiple Choice

In two-good,one-period model,when the terms of trade move against you,


A) production of good a increases and consumption of good a decreases.
B) production of good a increases and consumption of good a is ambiguous.
C) production of good b increases and consumption of good a decreases.
D) production of good b decreases and consumption of good a increases.
E) production of good a is ambiguous and consumption of good a increases.

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