Suppose there is a real appreciation. This real appreciation is more likely to cause a reduction in net exports when
A) domestic output is relatively low.
B) foreign output is relatively high.
C) the Marshall-Lerner condition does not hold.
D) imports are not at all sensitive to price changes.
E) exports and imports are relatively sensitive to price changes.
E
You might also like to view...
Which of the following would be likely to change the relative efficiency of trucks versus trains in carrying freight?
A) Higher wages for truck drivers B) More powerful locomotives C) Tolls on interstate highways D) All of the above.
What is the incentive for a firm to join a cartel?
A) to be able to earn larger profits than if it was not part of the cartel B) to be able to earn profits in the long run but not in the short run C) to produce a larger amount of output than if it was not part of the cartel D) to completely insulate itself from competition