Which of the following statements about international trade is ...

[stevenposner]

Which of the following statements about international trade is true?
 
  A) Potentially, a country can have absolute advantage in all goods.
  B) Potentially, a country can have relative advantage in all goods.
  C) After trade, countries tend to specialize in the production of those goods in which they enjoy absolute advantage.
  D) None of the above is true.

Question 2

What lessons did Mexico's policy makers learn from the 1980s debt crisis? What reforms did President Salinas pursue? What were his main goals?
 
  What will be an ideal response?

[verrinzo]

Answer to Question 1

A

Answer to Question 2

Policy makers learned that their management of the macroeconomy had to improve (don't ignore budget and trade deficits); that markets need to play a larger role in resource allocation to increase competitiveness and attract capital; that ISI policies were no longer best for industrial development, and to instead follow more traditional ideas of comparative advantage. President Salinas continued working to bring the federal budget under control, increased the rate of privatization of state-owned businesses, put Mexico in line to qualify for U.S. debt relief under the Brady Plan, reduced tariffs and important licensing requirements, and proposed a free trade agreement with the United States. He hoped to tie up the domestic economic reforms Mexico had made through an international treaty and to attract foreign capital for the development of Mexico's economy.