Author Question: The focal point of the Bretton Woods system was the: a. Great Britain pound. b. institution of ... (Read 42 times)

j.rubin · **on:** Jun 30, 2018

The focal point of the Bretton Woods system was the:
a. Great Britain pound.
b. institution of special drawing rights.
c. U.S. dollar.
d. gold reserve.
e. management of commodity money.

Question 2

What is the law of comparative advantage, and why is it important in international trade?

bpool94 · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

c

Answer to Question 2

The law of comparative advantage states that aggregate output is maximized when countries specialize in the production of goods for which they are the lowest opportunity cost producer, and then trade for other goods. Tit explains how countries can improve their situation through trade, rather than producing all goods themselves.