Consider a developed country, Country A.Assume that the trade volume (exports + imports) with respect to its economic development level can be described by the following function:T(D)=2D^2+5D+9Where:T(D) represents the trade volume in billions of dollars.D is the level of development, measured by some index (e.g., Human Development Index) where 0≤D≤10.Calculate the derivative of T(D) with respect to D. Interpret result in terms of the rate of change of trade volume with respect to development.At what level of development D does the country experience the highest rate of change in trade volume?If the standard deviation in the development index scores of developed countries is 1.2, how would this affect interpretation of trade patterns among developed countries?Note: For the purposes of this question, assume that the relationship is purely mathematical and doesn't account for other real-world factors that might influence trade volume.

Trade and economic development are closely interconnected. In many economic models, as a country…

Answered: Consider a developed country, Country…

Macroeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506756

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter17: Institutions, Policies, And Cross-country Differences In Income And Growth

Section: Chapter Questions

Problem 13CQ

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Consider a developed country, Country A.

Assume that the trade volume (exports + imports) with respect to its economic development level can be described by the following function:

T(D)=2D^2+5D+9

Where:

T(D) represents the trade volume in billions of dollars.
D is the level of development, measured by some index (e.g., Human Development Index) where 0≤D≤10.

Calculate the derivative of T(D) with respect to D. Interpret result in terms of the rate of change of trade volume with respect to development.
At what level of development D does the country experience the highest rate of change in trade volume?
If the standard deviation in the development index scores of developed countries is 1.2, how would this affect interpretation of trade patterns among developed countries?

Note: For the purposes of this question, assume that the relationship is purely mathematical and doesn't account for other real-world factors that might influence trade volume.

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