Assume that Brazil and Mexico have floating exchange rates. Other things unchanged, if the price level is stable in Mexico, but Brazil experiences rapid inflation:

In a country with a working-age population of 300 million, 230 million workers are employed and 40 million workers are unemployed. What is the labor force participation rate?

A) 100 percent B) 90 percent C) 65 percent D) 5 percent

When two countries specialize and trade with one another total production:

A. may increase, depending on trade relations. B. and consumption remain unchanged. C. increases, but only if comparative advantage exists. D. remains unchanged but consumption rises.