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What would the likely impact of a depreciation of the domestic currency be on the level of output and income and the trade balance? A. The domestic level of output and income will increase, and there will be a deterioration of the trade balance. B. The domestic level of output and income will decrease, and there will be a deterioration of the trade balance. C. The domestic level of output and income will increase, and there will be an improvement of the trade balance. D. The domestic level of output and income will decrease, and there will be an improvement of the trade balance.

What would the likely impact of a depreciation of the domestic currency be on the level of output and income and the trade balance? A. The domestic level of output and income will increase, and there will be a deterioration of the trade balance. B. The domestic level of output and income will decrease, and there will be a deterioration of the trade balance. C. The domestic level of output and income will increase, and there will be an improvement of the trade balance. D. The domestic level of output and income will decrease, and there will be an improvement of the trade balance.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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with Effect of currency depreciation

What would the likely impact of a depreciation of the domestic currency be on the level of output and income and the trade balance? A. The domestic level of output and income will increase, and there will be a deterioration of the trade balance. B. The domestic level of output and income will decrease, and there will be a deterioration of the trade balance. C. The domestic level of output and income will increase, and there will be an improvement of the trade balance. D. The domestic level of output and income will decrease, and there will be an improvement of the trade balance.
Transcribed Image Text:What would the likely impact of a depreciation of the domestic currency be on the level of output and income and the trade balance? A. The domestic level of output and income will increase, and there will be a deterioration of the trade balance. B. The domestic level of output and income will decrease, and there will be a deterioration of the trade balance. C. The domestic level of output and income will increase, and there will be an improvement of the trade balance. D. The domestic level of output and income will decrease, and there will be an improvement of the trade balance.
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