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THE THEORY OF INTERNATIONAL TRADE 1 The Subject of International Trade
The Factors of Production as Determinants of Interna tional Trade
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abroad added additional alternative American amount arbitrage areas assets assume balance of payments bank bank reserves borrowing British Canadian dollar capital account capital flows cent central bank Chapter competitive costs cotton cloth country's creditor currency current account customs union decline deficit deposits depreciation devaluation dollars domestic economy effect elasticity equal equilibrium example exchange expand exports factors of production finance fluctuating foreign currencies foreign-exchange market forward contract forward pounds forward rate francs funds German gold Hence higher impact imports income increase industry inflow interest rates investment labor less loss lower marginal cost marginal revenue ment million offset outflow output possible problem profit purchasing power raise ratio receipts reduce relative reserves result rise sector sell shift short-term capital spending spot pound supplier surplus tariff tend thereby tion Treasury Bills underdeveloped United volume wages workers yards of cotton yards of linen