Now suppose that Southern workers receive a raise to €2 per day.Will trade be possible at the exchange rate you found in the last question?

Question

Quizplus · Accepted Answer

Since workers in the South receive a raise to €2 per day, their productivity has increased and the purchasing power of their currency has risen. Therefore, trade is still possible at the exchange rate found in the last question.

Now Suppose That Southern Workers Receive a Raise to €2