For This Question,assume the Marshal-Lerner Condition Holds

question 2

Multiple Choice

For this question,assume the Marshal-Lerner condition holds.Which of the following would occur as a result of an increase in the real exchange rate?

• A)an improvement of the trade balance
• B)a reduction in the quantity of imports
• C)an increase in domestic output
• D)all of the above
• E) none of the above

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Definitions:

Insight

The ability to gain a clear and deep understanding of a situation or concept, often leading to a breakthrough or solution.

Habituation

A psychological learning process wherein there is a decrease in response to a stimulus after being repeatedly exposed to it over time.

Crepuscular

Pertaining to animals that are active primarily during twilight, i.e., at dawn and dusk.

Nocturnal

Describing organisms that are active primarily during the night and sleep during the day.