Offer Curves: Knowledge Summary Blue curve is the Original Offer Curve ; Red curve is the New Offer Curve.
Nation A: exports good X, and imports good Y. Nation B: imports good X, and exports good Y. Nation As Offer Curve rotates rightward when: Price of good X falls when: . Demand of good X falls, and/or . Supply of good X rises. Excess Supply (Deficient Demand) of Exportable good X. Price of good Y rises when: . Demand of good Y rises, and/or . Supply of good Y falls. Excess Demand of Importable good Y. Nation Bs Offer Curve rotates rightward when: Price of good X falls when: . Demand of good X falls, and/or . Supply of good X rises. Excess Supply (Deficient Demand) of Importable good X. Price of good Y rises when: . Demand of good Y rises, and/or . Supply of good Y falls. Excess Demand of Exportable good Y. The results are that: 1. Nation A is willing to export less and import more; 2. Nation As Export Volume falls and Import Volume rises; 3. Nation As Terms of Trade deteriorates. The results are that: 1. Nation B is willing to export more and import less; 2. Nation Bs Export Volume rises and Import Volume falls; 3. Nation Bs Terms of Trade improves.
Nation A: exports good X, and imports good Y. Nation B: imports good X, and exports good Y. Nation As Offer Curve rotates leftward when: Price of good X rises when: . Demand of good X rises, and/or . Supply of good X falls. Nation Bs Offer Curve rotates leftward when: Price of good X rises when: . Demand of good X rises, and/or . Supply of good X falls. Excess Demand of Exportable good X. Price of good Y falls when: . Demand of good Y falls, and/or . Supply of good Y rises. Excess Supply (Deficient Demand) of Importable good Y. Excess Demand of Importable good X. Price of good Y falls when: . Demand of good Y falls, and/or . Supply of good Y rises. Excess Supply (Deficient Demand) of Exportable good Y. The results are that: 1. Nation A is willing to export more and import less; 2. Nation As Export Volume rises and Import Volume falls; 3. Nation As Terms of Trade improves. The results are that: 1. Nation B is willing to export less and import more; 2. Nation Bs Export Volume falls and Import Volume rises; 3. Nation Bs Terms of Trade deteriorates. ()