Refer to the Information Provided in Table 20 $\quad$ $\quad$

question 186

Multiple Choice

Refer to the information provided in Table 20.1 below to answer the question(s) that follow.
Table 20.1 $\quad$$\quad$$\quad$$\quad$$\quad$ $\text {Mexico}$$\quad$ $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text {Guatemala}$
$\begin{array}{rrrr} \text {Oranges}& \text {Bananas}& \text {Oranges}& \text {Bananas}\\ \text { bushel/acre}&\text { bushel/acre }&\text { bushel/acre}&\text { bushel/acre }\\\hline 200 & 0 & 50 & 0 \\160 & 40 & 40 & 20 \\120 & 80 & 30 & 40 \\80 & 120 & 20 & 60 \\40 & 160 & 10 & 80 \\0 & 200 & 0 & 100 \\\hline\end{array}$

-Refer to Table 20.1. Guatemala has

• A) a comparative advantage in orange production.
• B) an absolute advantage in orange production.
• C) an absolute advantage in banana production.
• D) a comparative advantage in banana production.

---

Definitions:

Exchange Rate Risk

The potential for investors or businesses to experience losses due to changes in the currency exchange rates affecting the value of their investments or transactions.

Canadian Dollars

The official currency of Canada, represented by the symbol CAD or sometimes CA$.

Exchange Rate

Specifies the number of units of a given currency that can be purchased for one unit of another currency.

Exchange Rate Risk

Exchange rate risk, or currency risk, refers to the potential for loss due to fluctuations in the foreign exchange rate between two currencies.