Why threatening to change the exchange pattern in an existing economic relationship is often insufficient to guarantee the power of negotiation between states?

Why threatening to change the exchange pattern in an existing economic relationship is often insufficient to guarantee the power of negotiation between states?
A . It may impact the raw material needed for manufacturing products.
B. The sender can derive political leverage from the target’s dependence on the gains from a trading relationship
C. The sender must be willing to sacrifice some of its gains from trade
D. It will domestically impact the sender economy
E. If an exchange is taking place between two rational economic actors, then the terms of exchange can be assumed to be Pareto optimal

View Answer

Answer: B,C,E

Explanation:

If the sender itself is willing to sacrifice some of its profits from trade in exchange for new political demands and the sender derives political leverage from the target’s reliance on the gains from a trading relationship. The sender must be willing to sacrifice some of its trade gains because, ideally, if there is an exchange between two rational economic actors, then it can be assumed that the terms of exchange are optimal for Pareto.