For any pair of countries, there is only one single exchange rate that can lead automatically to both countries realizing the gains from specialization and comparative advantage.

Question

Quizplus · Accepted Answer

Exchange rates can fluctuate due to market forces, and there can be multiple exchange rates (official, black market, etc.) between countries. The realization of gains from specialization and comparative advantage depends on various factors, including trade policies, not just the exchange rate.

For Any Pair of Countries, There Is Only One Single