Final answer:
"Export price escalation" refers to the increase in the initial selling price of goods traded across borders. This can affect the quantity of exports sold and the quantity of imports into the exporting country. Statement is True.
Step-by-step explanation:
The term "Export price escalation" refers to the increase in the initial selling price of goods traded across borders. This means that when prices rise in the exporting country (such as the United States) while remaining fixed in other countries, the exported goods become relatively more expensive compared to goods in the rest of the world. As a result, the quantity of exports sold may decrease, while the quantity of imports into the exporting country may increase.
This phenomenon occurs due to the impact of relative prices on international trade. When prices rise domestically while remaining fixed in other countries, the higher domestic price level makes the exports more expensive for foreigners, leading to a decrease in the quantity of exports sold. At the same time, the higher domestic price level makes foreign goods relatively more attractive to domestic buyers, increasing the quantity of imports.
In summary, "Export price escalation" is the increase in the initial selling price of goods traded across borders, which can have an impact on the quantity of exports sold and the quantity of imports into the exporting country.