Question

6. if the demand for the exchange of pesos, the supply of dollars increases as well.

true or false?

25. when labor moves away from the labor abundant country output will ______ in that country and _____ in the destination country.

options are as follows:

remain unchanged

increase

decrease

Answer 1

1) Solution: True

Explanation: An increase in the demand for Mexican peso creates a rightward shift of the demand curve, ultimately causing supply of pesos shifting to the left. It causes an increase in equilibrium exchange rate

2) Solution: remain unchanged, increase

Explanation: As the country's relative endowment of labor is huge in comparison to other countries thus with the movement of labor the output remains unchanged however increases output in labor intensive countries