A real depreciation will initially cause a reduction in output when which of the following holds?
A) the Marshall-Lerner condition
B) the J-Curve effect
C) net exports are initially zero
D) net exports are initially negative
E) net exports are initially positive
B
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You are trying to decide whether to purchase the latest Harry Potter book online or borrow it from the library. There is no charge for borrowing a book from the library, but going to the library takes more time than ordering a book online. Regardless of how you get the book, its benefit to you is the same. If the cost of buying the book online is $13, then you should:
A. borrow the book from the library if the cost of doing so (in terms of the extra time it takes) is greater than $13. B. borrow the book from the library if the cost of doing so (in terms of the extra time it takes) is less than $13. C. borrow the book from the library because you can get it from the library for free. D. buy the book online because it takes less time.
Suppose Aiyanna's Pizzeria currently faces a linear demand curve and is charging a very high price per pizza and doing very little business. Aiyanna now decides to lower pizza prices by 5% per week for an indefinite period of time. We can expect that each successive week
A. demand will become less price elastic. B. the elasticity of supply will increase. C. price elasticity of demand will not change as price is lowered. D. demand will become more price elastic.