Based on Table 3.1, if the world price of computers is four pairs of shoes, then the optimal strategy for each country would be
A) to specialize in shoes.
B) to specialize in computers.
C) for Mexico to specialize in shoes, and the United States in computers.
D) for the United States to specialize in shoes, and Mexico in computers.
E) None of the above.
B
Economics
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One popular case for protectionism is the "Protection Saves Jobs" argument. What is the nature of this argument? What is its weakness?
What will be an ideal response?
Economics
Suppose that the spot exchange rate for a foreign currency is equal to $120, while the interest rate in dollars is 2% and the interest rate in the foreign currency is 3%. What is the approximate forward rate that is consistent with this situation?
A) $115.56 B) $124.44 C) $118.77 D) None of the above.
Economics