Consider the economies of cakeland which produces cupcakes


Consider the economies of Cakeland, which produces cupcakes, and Creamland, which produces ice cream. Labor is not mobile between Cakeland and Creamland. Suppose that people in both economies begin to demand more ice cream and fewer cupcakes. The resulting unemployment in Cakeland is likely to be lowest under a (FIXED / FLEXED) exchange rate system.

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Business Economics: Consider the economies of cakeland which produces cupcakes
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