Only producing certain goods instead of everything you need is known as importing balance of trade specialization absolute advantage. Floating exchange rates are set daily by the Fed values are determined by supply and demand are an established by an agreement of two nations are a result of bilateral agreements. If the US dollar appreciates relative to the Canadian dollar, what is a likely outcome? trade surplus in US trade deficit in both trade deficit in Canada trade surplus in Canada. Which has more to do with opportunity cost? absolute advantage comparative advantage. A limit on the number of cars that can be brought into the country import quota customs duty tariff voluntary export constraint.
