The 1980s were a Lost Decade for Latin America

In Lithasia, the opportunity cost of producing a chair is two tables and in Barylia, the opportunity cost of producing a chair is 1/2 table. Which of the following statements is true?

A) Barylia has a comparative advantage in producing chairs. B) Lithasia has a comparative advantage in producing chairs. C) Barylia has a comparative advantage in producing tables. D) Lithasia has a comparative disadvantage in producing tables.

Real domestic interest rates would increase in a large open economy if

A) there were a temporary negative domestic supply shock. B) the government imposed capital controls and the capital and financial account had been in deficit. C) foreigners were more willing to save. D) there were a temporary negative supply shock abroad in a small open economy.