Refer to Table 2-9. Does either Japan or Thailand have an ...

[wrbasek0]

Refer to Table 2-9. Does either Japan or Thailand have an absolute advantage and if so, in what product?
 
  A) Thailand has an absolute advantage in rice.
  B) Japan has an absolute advantage in wristwatches.
  C) Japan has an absolute advantage in rice.
  D) Thailand has an absolute advantage in both products.

Question 2

According to the theory of purchasing power parity, if the inflation rate in the United States is greater than the inflation rate in Canada, explain what should happen to the exchange rate between the U.S. dollar and the Canadian dollar.
 
  What will be an ideal response?

[prumorgan]

Answer to Question 1

D

Answer to Question 2

The value of the U.S. dollar should decline relative to the value of the Canadian dollar. It will take more U.S. dollars to buy a Canadian dollar.

[wrbasek0]

Thanks for the timely response, appreciate it

[shewald78]

Excellent