Multiple Choice
According to the Marshall-Lerner condition, a currency depreciation is least likely to lead to an improvement in the home country's trade balance when
A) home demand for imports is inelastic and foreign export demand is inelastic.
B) home demand for imports is elastic and foreign export demand is inelastic.
C) home demand for imports is inelastic and foreign export demand is elastic.
D) home demand for imports is elastic and foreign export demand is elastic.
Correct Answer:
Verified
Correct Answer:
Verified
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