Suppose That Country A's Total Exports Are 10,000 Units of Good

Multiple Choice

Suppose that country A's total exports are 10,000 units of good X at a price of $20 per Unit, meaning that country A's export earnings or receipts are $200,000. Suppose also That the foreign price elasticity of demand for country A's exports of good X is (-) 0.6. If Country A's prices for all goods, including its exports, now rise by 10% because of a gold Inflow such as in the Mercantilist model, then, other things equal, country A's exports of Good X will fall by __________ and country A's export earnings or receipts will become __________.

A) 600 units; less than $200,000
B) 600 units; greater than $200,000
C) 1,000 units; less than $200,000
D) 1,000 units; greater than $200,000