Biology Forums - Study Force

Suppose that labor is mobile between countries A and B.  If the relative demand for goods rises in country A, then labor can flow from ______________.  It may be possible in this situation for countries A and B to __________________ which would help to___________________.

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country A to country B; fix the exchange rate between the two countries (or have a common currency); eliminate the risks associated with having a flexible exchange rate.

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country B to country A; impose trade restrictions upon one another; increase employment in country A

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country B to country A; fix the exchange rate between the two countries (or have a common currency); eliminate the risks associated with having a flexible exchange rate

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country A to country B; adopt flexible exchange rates; reduce the risk of exchange rate fluctuations

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