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.

---

Definitions:

Just Noticeable Difference

The minimal change in a stimulus that can just barely be detected by an organism.

Absolute Threshold

The lowest level of stimulation that a person can consciously detect 50 percent of the time the stimulation is present.

Stimulus

is any object or event that elicits a sensory or behavioral response in an organism.

Absolute Threshold

The minimum intensity of a stimulus required to be correctly detected at least 50% of the time.