Maximum Feasible Hourly Production Rates (in Tons) of EitherKnives or Forks Using All Available ResourcesProductCountry AlphaCountry BetaKnives93Forks612Use the above table. Assuming constant opportunity costs, if countries Alpha and Beta specialize based on comparative advantage, then
A. Alpha should specialize in forks and Beta should specialize in knives.
B. Alpha should specialize in knives and Beta should specialize in forks.
C. Beta should produce both items.
D. Alpha should specialize in producing both items.
Answer: B
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In the above figure, suppose the economy is initially at point A. The interest rate in Japan rises relative to the interest rate in the United States. As a result, there will be a change from point A to a point such as ________
A) point B B) point C C) point D D) point E
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a. 5 percent b. 6 percent c. 7 percent d. 8 percent
Assuming the free flow of capital across borders, if country A wants to fix its exchange rate with country B, then:
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