In Which of the Following Cases Can We Conclude, Without

question 6

Multiple Choice

In which of the following cases can we conclude, without any further information, that a depreciation of a country's currency will worsen the country's trade balance (or current account balance) .

• A) demand curve for exports is horizontal; supply curve of imports is horizontal
• B) demand curve for exports is vertical; demand curve for imports is vertical
• C) demand curve for exports is horizontal; demand curve for imports is horizontal
• D) supply curve of exports is horizontal; supply curve of imports is horizontal

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Definitions:

Suppliers

Businesses or individuals that provide goods or services to another business, often as part of a supply chain.

Franchise

A license to sell another’s products or to use another’s name in business, or both.