Question

Which of the following factors will help the United States regain comparative advantages in industries in which it has lost comparative advantages? Multiple Choice The value of the U.S. dollar falls. The value of the U.S. dollar rises. The United States imports more goods. Wages in the United States rise.

Answer 1

Answer:

U.S. dollar falls.

Explanation:

Comparative advantage is defined as the ability of a nation to produce a good or service at lower cost than other countries that also produce the good. This is the basis of international trade because countries tend to specialise in producing the products in which they have comparative advantage, while importing those in which they do not have comparative advantage.

If the United States has lost comparative advantage in an industry. To regain it if the US dollar loses value, the wages in the United States will be lower than those in other countries. The relatively lower wage will help the United States regain competitive advantage.