Question
28
Not yet
answered
Marked out of
1.00
Question
29
Not yet
answered
Marked out of
1.00
For the Marshall-Lerner condition to hold, …
Select one:
A.
an appreciation must eventually lead to an increase in net exports and an improvement in the trade balance.
B.
a depreciation must eventually lead to an increase in net exports and an improvement in the trade balance.
C.
a depreciation must eventually lead to an increase in net imports and an improvement in the trade balance.
D.
a depreciation must eventually lead to an increase in net exports and a deterioration in the trade balance.
Clear my choice
Which one of the following statements is INCORRECT regarding the impact of depreciation on the level of output and income and the trade balance?
Select one:
A.
If the Marshall-Lerner condition holds, the positive effect of an increase in exports on the trade balance outstrips the negative effect of an increase in imports, which
results from the increase in output and income and an improvement in the trade balance.
B.
The lower price of exports causes an increase in exports, which, in turn, increases the demand for domestic goods and the level of output and income.
C.
The increase in the relative price of imports causes the switching of expenditure from foreign goods (which are now more expensive) to domestically produced
goods. This results in a higher demand for domestic goods and a higher output and income level.
D.
There will be an upward movement along the NX curve, and a trade surplus will occur.
Clear my choice
◄ Assessment 1
Jump to...
Assessment 3 ►
Dashboard
/
Courses
/
UNISA
/
2023
/
Semester 1
/
ECS2602-23-S1
/
Welcome to the ECS2602_2023 semester site
/
Assessment 2
Dashboard
Calendar
