Ensure that exchange rate for currency is as low as possible

Reference no: EM131314536

1. The nation of Pixley has an absolute advantage in everything it produces compared to the nation of Hooterville. Could these two nations still benefit by trading with each other? Explain.

2. Evaluate the following statement: If lower exchange rates increase a nation's exports, the government should do everything in its power to ensure that the exchange rate for its currency is as low as possible.

Reference no: EM131314536

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