Asked by
Kelly Hutnan
on Nov 22, 2024
Verified
Zalzhar, an African country, prefers conducting most of its trade with Rumbasa, another African country. This trade relation has evolved because of the fact that both the countries have consumers that come from the same kind of economic background and thus have similar purchasing power and preferences in goods. Given the information, it can be said that this scenario reflects the _____.
A) Ricardian trade theory
B) theory of economies of scale
C) Heckscher-Ohlin theory of trade
D) theory of overlapping demand
Overlapping Demand
A situation where consumers' needs and desires partially coincide, leading to products or services being desired by multiple market segments.
Economic Background
The set of conditions including historical, geographical, and cultural factors that influence the economic activities and outcomes of a person or entity.
Purchasing Power
The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy.
- Understand different trade theories and their applications in the global economy.
Verified Answer
MK
Learning Objectives
- Understand different trade theories and their applications in the global economy.