Which Approach Predicts That If an Economy Operates at Full

question 113

Multiple Choice

Which approach predicts that if an economy operates at full employment and faces a trade deficit,currency devaluation (depreciation) will improve the trade balance only if domestic spending is cut,thus freeing resources to produce exports?

• A) The absorption approach
• B) The Marshall-Lerner approach
• C) The monetary approach
• D) The elasticities approach

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Definitions:

Chronic Conflict

Long-standing disagreements or battles between groups or individuals that are resistant to resolution.

Adaptive

Adaptive refers to the ability or quality of adjusting to new conditions or environment, often used in psychology to describe behaviors or strategies that are beneficial for coping with stress or change.

Transactional Analysis

A psychological theory and therapy focusing on the interactions or 'transactions' between individuals and the psychological processes behind them.

Interactions

The dynamic process of communication or relationship between people or entities, influencing or being influenced by each other.