If two countries A and B are member of a currency union and there is a shift in consumer preferences away from the goods of country A and towards those of country B than which one of the following would help to offset the effect of the resulting changes in aggregate demand in A and B on inflation and unemployment in the tow countries ?

A. A low degree of capital mobility between the two countries

B. An increase in government spending in country (A)

C. A depreciation in the foreign exchange value of the common currency

D. A high degree of labour mobility between the tow countries
Be the first to comment if anything wrong with this mcq
Your comment successfully submitted!
It will automatically posted after review and approval by our staff member.