Prices in the European ERM countries on fixed exchange rates have converged ___ than for nations outside the ERM.

Labor productivity in the United States was 5.4 times higher in the United States than in China in 2010. A key reason that labor productivity is higher in the United States is because the United States

A) has a higher growth rate, based on GDP per capita, than China. B) has a higher life expectancy and higher birth rate than China. C) devotes more resources than China to developing new technology and accumulating human capital. D) devotes more resources than China to developing export markets to boost its real GDP and income.

When two countries specialize in the production of different goods and trade with each other, it is most likely each country will

A) export the goods in which it has a comparative advantage. B) export the goods in which it has an absolute advantage. C) import the goods in which it has a comparative advantage. D) import the goods in which it has an absolute advantage.