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Unformatted text preview: One worker can produce Cans of Tuna Bottles of Maple Syrup Country A 9 3 Country B 1 4 If countries A and B decide to participate in international division of labor and international trade, _______ will be specialized in producing tuna because _______. (A) B; her absolute advantage is larger (B) A; her absolute advantage is smaller (C) A; her comparative advantage is larger (D) B; her comparative advantage is larger (E) A; her absolute advantage is larger 3. If a state with a fixed exchange rate raises its interest rate, this will lead to a. Capital flowing in b. Capital flowing out c. No change in capital levels d. Either A or B (with no way to predict which one)...
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- Fall '08
- International Relations