Question.2971 - Is it possible for a country to have absolute advantage in some product, but not comparative advantage in that same product? The alternative to floating exchange rates, is fixed exchange rates, maybe using gold as a basis. Can you see why this won't work, and causes movement of gold from one place to another for no good reason?
Answer Below:
Answer xxxxxxxx advantage xx the xxxxxxx rsquo x ability xx produce x good xxxx efficiently xxxx other xxxxxxxxx Thus xx a xxxxxx the xxxxxxxx of xxxxx countries xxxx be xxxxxxxx in xxx quality xxxxxxx as x result xx which xxx product xxxx be xxxxxx priced xxxxxxxx the xxxxxxx will xxxxxx a xxxxxxxxx niche xxx itself xxx will xxx be xxxxxxxxx for xxxx consumption xxxxxxxxxxx Advantage xx the xxxxx refers xx a xxxxxxx rsquo x ability xx produce xxx good xxxxxxx than xxx other xxxxxxxxx and xxxx take xxxxxxx of xxx price xxxxxxxxxxxxx This xxxxxxxxxx in xxx prices xxxx create xx imbalance xx the xxxxxx which xxxx be xxx off xx importing xxxxx cheaply xxxxxxxxx products xx the xxxxxxx country xxxx it xxxxx to xxxxxxxxx use xx resources xxxxx on xxx above xxxxxxxxxx it xx very xxxx possible xxxx a xxxxxxx has xx absolute xxxxxxxxx in x certain xxxxxxx but xx comparative xxxxxxxxx on xxxx product xxx main xxxxxx being xxxx the xxxxxxx will xx of x higher xxxxxxx and xxxx command x higher xxxxx in xxx market xxxx it xxxx offset xxx Comparative xxxxxxxxx that x company xxx enjoy xx that xxxxxxx References xxxxxxxxxx Reinhard xxxx Trade xxx Absolute xxx Comparative xxxxxxxxx Answer x fixed xxxxxxxx rate xx a xxxxxxxxx used xx the xxxxxxxxxx to xxx the xxxxxxxx within x narrow xxxxx band xxxx the xxxxxxxxxx interferes xxxx the xxxxxx market xxxxxxxxx and xxxxxxx restrictions xx control xxx foreign xxxxxxxx rate xxx currency xx not xxxx absolutely xxxxx but xx allowed xxxx scope xx movement xx a xxxx restricted xxxxxxxxxxx The xxxxx of x fixed xxxxxxxx rate xxxx not xxxx be xxx currency xx the xxxxxxxxxxxx but xx can xxxx be xxx of xxx actively xxxxxx metals xxxx can xxxx be xxxx as xxx base xxx the xxxxx exchange xxxx Thus xx means xxxx a xxxxxxxxxx denomination xxxxx be xxxxxxxxxxxx for x particular xxxxxxxxx of xxxx Thus xxx concept xx currency xxxx be xx longer xx place xxx this xxxx will xx played xx the xxxx metal xxxxxx The xxxx and xxx most xxxxxxx problem xx such x practice xx that xx acts xx a xxxx barrier xxx a xxxxxxxxx block xx growth xxxxxxx the xxxxxx has xx be xxxxxx with xxx abundance xx the xxxxxxx of xxx metal xxxxx using xxxx or xxx other xxxxx as x basis xxx fixed xxxxxxxx rate xx not x good xxxxxxxxxxx References xxxx Peijie xxx Economics xx Foreign xxxxxxxx and xxxxxx FinanceMore Articles From Economics
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