The simple Marshall-Lerner condition would suggest that one of the following cases would produce a worsening of the trade balance if the country's currency depreciated. Which one? (The negative sign on elasticities is being ignored; also, assume that trade is initially balanced.) Select one: a. elasticity of demand for exports = 0.8; elasticity of demand for imports = 0.5 b. elasticity of demand for exports = 0.4; elasticity of demand for imports = 0.6 c. demand curve for exports is vertical; demand curve for imports is horizontal d. elasticity of demand for exports = 0.8; elasticity of demand for imports = 0.1

Q: A relatively small U.S. balance-of-trade deficit is commonly attributed to a strong demand for U.S.…

A: The underlying reason strong demand for IT exports is normally attributed to strong foreign…

Q: The projected trade deficits for a country in 2021-2023 are in the following table: Net Year Exports…

A: Net exports are equal to exports less imports. Trade surplus occurs when exports are greater than…

Q: Derive and explain the Marshall-Lerner condition. If the Marshall-Lerner condition does not hold,…

A: The Marshall-Lerner condition is a criterion that determines whether a country's balance of trade…

Q: The following table shows the approximate value of exports and imports for the United States from…

A: Balance of trade or trade balance represents the difference between the values of export and import.…

Q: Will exchange rates correct a balance-of-trade deficit? Consider the case of a balance-of-trade…

A: The balance of trade deficit occurs when the value of imports of a country exceeds the value of its…

Q: Nigeria has a positive trade balance of $10 billion. If it has a negative balance of services of $8…

A: Balance of trade is the difference between the country's exports of goods and services and the…

Q: QUESTION 15 Which of the following will cause the Australian dollar (AUD) to appreciate against the…

A: The overall quantity demanded in a market is the product of the individual quantities that each and…

Q: If Country A and Country B have the same population size, then the standard of living in these two…

A: “Since you have posted multiple questions, we will provide the solution only to the first question…

Q: In 2019, the total U.S. trade with foreign countries was $5.6 trillion. How do U.S exports affect…

A: Importing and exporting activities can have an impact on a country's GDP, currency rate, inflation,…

Q: Currently, many electronic goods from China are circulating in the domestic market. This condition…

A: The deficit is the situation when the expenditure is higher than the revenue of the country.

Q: In 2011, an array of factors, including the conflict in Libya, contributed to soaring oil prices.…

A: The exchange rate (XR) is the rate at which one country's currency is traded for a different…

Q: Suppose the current exchange rate is 115 yen per dollar. We currently have a demand for 50 units of…

A: First, we figure out the equation of the demand curve. Given that when price is 800 yen and quantity…

Q: Consider a small open economy producing a good which is an imperfect substitute for a foreign good.…

A: Monetary policy is the arrangement of moves made by a country's central bank to control the money…

Q: "In an economy with a high dependency on imported oil, what is the likely macroeconomic impact of a…

A: When the value of imports and exports in an economy is equal, the condition is known as the trade…

Q: Which of the following represent a source of supply to US financial capital markets? Private…

A: A market is a location where two parties engage in the trading of goods and services for cash. The…

Q: When a U.S. firm sells a good abroad for, say, 100 euros (assume $1.5=1 euro), U.S. net exports…

A: Net capital outflows are also termed to be net foreign investment; and refer to the net funds flow…

Q: Question 3 (i) Explain the relationship between the current account balance given by exports (X)…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: quilibrium

A: An open economic system refers to a country that engages in worldwide exchange and financial…

Q: Suppose the current exchange rate is 115 yen per dollar. We currently have a demand for 50 units of…

A: Introduction Suppose we have linear demand function. At current exchange rate, we can demand  Demand…

Q: Suppose you are a British venture capitalist holding a major stake in an e-commerce start-up in…

A: Inflation The rate at which price rises over a particular time period is known as inflation.…

Q: Question 13 If the U.S. dollar appreciates, then U.S. exports O a) increase and U.S. imports…

A: Exchange rate basically refers to the rate of exchange at which the currency of one nation can be…

Q: How to increase or decrease government spending to achieve trade balance ( NX=0

A: Trade balance refers to the difference between export and import and such difference is zero. The…