For This Question,assume That the Marshall-Lerner Condition Does Not Hold

Multiple Choice

For this question,assume that the Marshall-Lerner condition does not hold.A reduction in the real exchange rate will tend to cause which of the following to occur?

A) a reduction in NX and a reduction in foreign output (Y*)
B) a reduction in NX and an increase in domestic output (Y)
C) an increase in NX and a reduction in Y
D) an increase in NX and an increase in Y
E) none of the above