When you specialize in a task that you do best, you are applying the:
a. law of supply.
b. law of comparative advantage.
c. law of demand.
d. law of absolute advantage.
b
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Many argue that the "soft power" of the U.S. has been reduced, referring to its
a. negotiating ability. b. military presence. c. export level. d. moral leadership.
How does an increase in the relative price of a country's goods in terms of foreign goods, or real exchange rate, affect its balance of trade?
A) An increase in the real exchange rate reduces imports, raises exports, and increases the balance of trade. B) An increase in the real exchange rate raises imports, reduces exports, and reduces the balance of trade. C) An increase in the real exchange rate reduces imports, raises exports, and reduces the balance of trade. D) An increase in the real exchange rate raises imports, reduces exports, and increases the balance of trade.