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Q. Now, consider that the relative price of A is actually not higher than Albania's autarkic level of 1, but quite the opposite (e.g. PA/PB = 0.5). Could Albania still be able to gain from trade? If so, where could be its production point? Given the information in this question, where is Albania's comparative advantage?
Answer: Yes as long as the world's terms of trade differed from those of Albania that country stands to increase from international trade. In this particular case its aim of production with trade would be at point c.
Q. Illustrate why when Norway unilaterally fixes its exchange rate against the euro but leaves the krone free to float against the non-euro currencies, it is unable to keep at leas
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Q. Explain why after, say Norway unilaterally pegs the krone to the euro, domestic money market disturbances will no longer affect domestic output despite the continuation of float
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Q. What is an SDR? Answer: An SDR abbreviation of Special Drawing Right at the IMF and holds a place as a world reserve currency some countries especially those that do
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