Assume That the Marshall- Lerner Condition Does Not Hold

question 34

Multiple Choice

Assume that the Marshall- Lerner condition does not hold. An increase in the real exchange rate will tend to cause which of the following to occur?

• A) A decrease in NX and no effect on Y.
• B) An increase in NX and an increase in Y.
• C) A decrease in NX and an increase in Y.
• D) An increase in NX and a decrease in Y.
• E) A decrease in NX and a decrease in Y.

---

Definitions:

Kaizen

A Japanese term for 'continuous improvement', often applied in business contexts to denote ongoing, incremental improvement strategies.

Reinforcement

In psychology, a consequence that strengthens an organism's behavior whenever that behavior is preceded by a specific antecedent stimulus.

Positive Behaviors

Actions or conduct that are considered beneficial, constructive, or promoting well-being and positive outcomes.

Secondary Reinforcers

Stimuli that become rewarding through their association with primary reinforcers, such as praise or money.