Two countries creates opportunities for arbitrage

Reference no: EM13741361

The difference in the prices of a good in two countries creates opportunities for arbitrage: trader buy the good at the low price in one country and sell it at a high price in the other. when the difference in the prices vanishes and the world price is established in both countries, there is no scope for trade anymore because no trader will be willing to buy the good in one country and sell it in another . Discuss the validity of this statment.

Reference no: EM13741361

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