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A Fall in the Relative Prices of a Country's Exports

question 57

True/False

A fall in the relative prices of a country's exports tends to increase that country's net exports, and, thereby, to raise its real GDP.


Definitions:

Perfectly Elastic Demand

A market situation where demand for a product can drastically change to infinity with the slightest change in its price.

Inelastic Demand

A situation where the demand for a product does not change significantly with a change in price.

More Elastic Demand

A situation where the demand for a product is more sensitive to changes in price, meaning quantities demanded change significantly even with small price fluctuations.

Competitive Advantage

A condition or circumstance that puts a company in a favorable or superior business position compared to its competitors.

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