Author Question: If a currency has a fixed exchange rate, it is not subject to the forces of supply and demand. ... (Read 31 times)

student77 · **on:** Jun 30, 2018

If a currency has a fixed exchange rate, it is not subject to the forces of supply and demand.

Indicate whether the statement is true or false

Question 2

U.S. U.K Wheat 12 6 Cloth 6 18 The table above shows United States and United Kingdom production of wheat (bushels per hour) and cloth (yards per hour). According to Adam Smith, which of the following is true?

A) The United States has an absolute advantage in the production of wheat.
B) The United States has an absolute advantage in the production of cloth.
C) There is no basis for trade between these countries.
D) The United States will gain more from trade than the United Kingdom.