Author Question: A country's foreign exchange reserves refers to A) the currency of the nation itself. B) the ... (Read 98 times)

maegan_martin · **on:** Jun 30, 2018

A country's foreign exchange reserves refers to

A) the currency of the nation itself.
B) the country's holdings of gold and internationally accepted currencies.
C) the total amount of a country's currency held by other nations.
D) the country's Special Drawing Rights (SDRs) at the IMF.

Question 2

Why do both developed and less-developed countries protect clothing and textiles heavily?

What will be an ideal response?

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

Answer to Question 1

B

Answer to Question 2

For developed countries, comparative advantage has been lost in these labor-intensive industries. For less-developed countries, these are major export sectors that also have a significant domestic market share, and so it is desirable to protect domestic markets while exporting these goods (in which they have a comparative advantage).