Assume the Marshall- Lerner Condition Holds

question 47

Multiple Choice

Assume the Marshall- Lerner condition holds. Which of the following would occur as a result of a decrease in the real exchange rate?

• A) An increase in domestic output.
• B) A decrease in the quantity of imports.
• C) An improvement of the trade balance.
• D) All of the above.
• E) None of the above.

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Definitions:

Poverty Rate

The percentage of the population whose income falls below a certain threshold, defining them as living in poverty.

Economic Deprivation

A condition where individuals or communities lack the financial resources and essential services to maintain a standard of living considered acceptable in society.

Poverty Rate

The percentage of the population whose income falls below the poverty line, indicating their inability to afford basic needs.

Average Income

A measure of the total income received by the average individual or household within a specified demographic or economic unit over a given period.