QUESTION 22 Suppose that • The Elasticity of Imports in the USA in the short Run is 0.5 • The Elasticity of Imports in Japan in the short Run is 0.6 • The Elasticity of Imports in the USA in the long Run is 0.9 • The Elasticity of Imports in the Japan in the long Run is 1 According to the Elasticities approach to the Current Account Balance, if the Exchange Rate goes from Yen $1/100 to Yen $1/50 . O The Current Account Balance will be unchanged The Current Account Balance in the US will deteriorate in the short run, and improve in the long run O The Current Account Balance in the US will deteriorate in the short run and in the long run O The Current Account Balance in the US will improve both in the short run and in the long run

QUESTION 22 Suppose that • The Elasticity of Imports in the USA in the short Run is 0.5 • The Elasticity of Imports in Japan in the short Run is 0.6 • The Elasticity of Imports in the USA in the long Run is 0.9 • The Elasticity of Imports in the Japan in the long Run is 1 According to the Elasticities approach to the Current Account Balance, if the Exchange Rate goes from Yen $1/100 to Yen $1/50 . O The Current Account Balance will be unchanged The Current Account Balance in the US will deteriorate in the short run, and improve in the long run O The Current Account Balance in the US will deteriorate in the short run and in the long run O The Current Account Balance in the US will improve both in the short run and in the long run

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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