For this question, assume the Marshal-Lerner condition holds. Which of the following would occur as a result of an increase in the real exchange rate?
A) an improvement of the trade balance
B) a reduction in the quantity of imports
C) an increase in domestic output
D) all of the above
E) none of the above
E
Economics
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If, when a firm doubles all its inputs, its average cost of production decreases, then production displays
A) declining fixed costs. B) diseconomies of scale. C) diminishing returns. D) economies of scale.
Economics
In a Bertrand model, graphically, the intersection of all firms' best-response curves determines
A) the Nash equilibrium prices. B) the dominant strategy for each firm. C) the degree of product differentiation. D) the price of the market leader.
Economics