One of the possible reasons for high sales and steady profit margins of General Motors, Ford, and Chrysler during 1950s and 1960s were aggressive pricing and design innovations

Assuming the Marshall-Lerner condition holds and using the ZZ/Y and NX graphs, illustrate graphically and explain what effect a real depreciation will have on output, exports, imports, and net exports. Clearly label all curves and clearly label the initial and final equilibria

What will be an ideal response?

If perfectly competitive firms are earning positive economic profits in the short run, then in the long run other firms will enter the market.

Answer the following statement true (T) or false (F)