Discuss this statement fully: \"Given that labor remains relatively immobile wit

Question

Discuss this statement fully: "Given that labor remains relatively immobile within Europe, the European Union's success in liberalizing its capital flows may have worked perversely to worsen the economic stability loss due to the process of monetary unification" Discuss this statement fully: "Given that labor remains relatively immobile within Europe, the European Union's success in liberalizing its capital flows may have worked perversely to worsen the economic stability loss due to the process of monetary unification"

Explanation / Answer

If the labor is immobile within Europe the wages would fall but due to more investment in capital the interest rate would rise and hence there would be inflation. Gold bullion would fall with the monetary policy of devaluation. The value of real money would fall.

By

Nishant Bhatt

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