If the US Currency Pass-Through Is 60 Percent,what Will Occur

question 6

Multiple Choice

If the US currency pass-through is 60 percent,what will occur as a result of a 15 percent depreciation in the value of the dollar?

• A)import prices to fall by 9 percent
• B)import prices to rise by 15 percent
• C)export prices to fall by 9 percent
• D)export prices to rise by 15 percent

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Definitions:

Good 2

Refers to a second good or item considered in a theoretical economic model, usually in the context of comparative analyses.

Fixed Ratio

A quantitative relationship between two or more variables where one variable is a fixed multiple of the others, often used to describe proportional relationships in finance and engineering.

Excess Goods

Products that exceed the demand in the market, often leading to surplus and potential waste.

Perfect Substitutes

Two goods that could be used in place of one another with no loss of utility to the consumer.