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Author Question: Currently the NAFTA nations do not meet the conditions for an optimal currency area. What are the ... (Read 122 times)

NClaborn

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on: Jun 30, 2018
Currently the NAFTA nations do not meet the conditions for an optimal currency area. What are the two main reasons why?
 
  What will be an ideal response?

Question 2

Suppose Mexico can produce 5 autos or 10 corn. Suppose the United States can produce 4 autos or 20 corn. If opportunity costs are constant for both countries, then
 
  A) the United States has a comparative advantage in corn production.
  B) Mexico has a comparative advantage in corn production.
  C) the United States cannot gain from trade with Mexico.
  D) the United States has a comparative advantage in auto production.


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ndhahbi

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Reply #1 on: Jun 30, 2018
Answer to Question 1

Historically Mexico's business cycle has not been correlated with the cycles in the United States and Canada; labor mobility is limited.

Answer to Question 2

A


NClaborn

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Reply 2 on: Jun 30, 2018
Excellent

AmberC1996

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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