Two countries, Northland and Southland, form a monetary union and adopt a shared currency, the 'Union Dollar'. Initially, a standard basket of goods costs 100 Union Dollars in both countries. Over the next year, the general price level in Northland rises by 5%, while in Southland it rises by 2%. From the perspective of a consumer in Southland, what has happened to the relative cost of goods from Northland?
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Two countries, Northland and Southland, form a monetary union and adopt a shared currency, the 'Union Dollar'. Initially, a standard basket of goods costs 100 Union Dollars in both countries. Over the next year, the general price level in Northland rises by 5%, while in Southland it rises by 2%. From the perspective of a consumer in Southland, what has happened to the relative cost of goods from Northland?
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