Country M is mainly involved in making cars, whereas country N concentrates on producing televisions. The two countries then exchange goods with one another. What is most likely to cause a fall in the extent of specialisation and trade?
- AThere is rising productivity in the production of cars in M and televisions in N.
- BThere is a change from fixed to floating exchange rates between M and N.
- CThere is a decrease in the costs of transporting cars and televisions between M and N.
- DThere is an increase in the mobility of factors of production within M and within N.