foreign equilibrium

foreign equilibrium

by Ella Risch -
Number of replies: 1

If markets are supposed to be at equilibrium with foreign trade, what happens when there is a war or natural disaster and exchange is limited due to resources?

In reply to Ella Risch

Re: foreign equilibrium

by Danny Weaver -
Great question! We would see the domestic resources going into the foreign exchange markets are diverted to the domestic market, most likely leading to a surplus in the domestic markets being followed by a the domestic suppliers cutting back since they aren't selling to the foreigners.
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