The law of comparative advantage says that a person should produce a good if she
a. has the greatest desire to consume that good
b. has the lowest opportunity cost of producing that good
c. has an absolute advantage in a related activity
d. has a comparative advantage in a related activity
e. is equally good at producing this good as someone else is
B
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What effect does an expansionary monetary policy in the U.S. have on the foreign trade sector?
A) The lower value of the dollar will decrease exports and increase imports. B) The lower value of the dollar will decrease imports and increase exports. C) The higher value of the dollar will decrease exports and increase imports. D) The higher value of the dollar will decrease imports and increase exports.
Because of their greediness, speculators are considered bad for exchange-rate markets
a. True b. False Indicate whether the statement is true or false