The Marshall-Lerner Condition states that, all else equal
A) nominal appreciation improves the current account if export and import volumes are sufficiently elastic with respect to the real exchange rate.
B) real depreciation improves the current account if export and import volumes are sufficiently inelastic with respect to the real exchange rate.
C) real appreciation improves the current account if export and import volumes are sufficiently elastic with respect to the real exchange rate.
D) real depreciation improves the current account if export and import volumes are sufficiently elastic with respect to the real exchange rate.
E) the sum of import and export elasticities must be equal to one in order for depreciation to occur.
D
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A sales tax is divided so that the
A) buyers pay the full amount if demand is perfectly elastic. B) buyers pay the full amount if supply is perfectly inelastic. C) sellers pay the full amount if supply is perfectly elastic. D) sellers pay the full amount if demand is perfectly elastic.
Workers work for after-tax wages, thus an income tax represents a reduction in the effective wage rate
a. True b. False