Multiple Choice
The foreign exchange market is stable (able to correct a trade deficit by a depreciation of the nation's currency) if ____________________
A) the sum of the absolute values of price elasticities of the US demand for imports and the foreign demand for US exports is greater than one.
B) the sum of the absolute values of price elasticities of the US demand for imports and the foreign demand for US exports is less than one.
C) the sum of the absolute values of price elasticities of the US supply of exports and the foreign supply of imports is greater than one.
D) the sum of the absolute values of price elasticities of the US supply for imports and the foreign demand for US exports is less than one.
Correct Answer:
Verified
Correct Answer:
Verified
Q15: Please explain the J-Curve effect in exchange
Q16: _ account(s)for the impact a change in
Q17: The US supply curve of euros can
Q18: When demand is unitary elastic,then a change
Q19: Under flexible exchange rates,a trade deficit is
Q21: The _ states that the foreign exchange
Q22: The US supply curve may be vertical
Q23: The proportion of an exchange rate change
Q24: The _ served as the automatic adjustment
Q25: What signs do the price elasticity of