Below the full-employment level of output, per-unit production costs rise and firms must receive higher product prices for them to be profitable.

When the economy is disturbed by a change in the output market

A) a fixed exchange rate has an advantage over a flexible rate. B) a floating exchange rate has an advantage over a fixed rate. C) a crawling peg exchange rate has an advantage over a flexible rate. D) a floating exchange rate has the same effect as fixed rate. E) a flexible exchange rate is not as effective as a fixed exchange rate.

Countries should specialize and import goods in which they have a comparative disadvantage

a. True b. False Indicate whether the statement is true or false