Suppose There Is a Real Appreciation

question 38

Multiple Choice

Suppose there is a real appreciation.This real appreciation is more likely to cause a reduction in net exports when

• A)domestic output is relatively low.
• B)foreign output is relatively high.
• C)the Marshall-Lerner condition does not hold.
• D)imports are not at all sensitive to price changes.
• E) exports and imports are relatively sensitive to price changes.