The Foreign Exchange Market Is Stable (Able to Correct a Trade

question 20

Multiple Choice

The foreign exchange market is stable (able to correct a trade deficit by a depreciation of the nation's currency) if ____________________

• A)the sum of the absolute values of price elasticities of the US demand for imports and the foreign demand for US exports is greater than one.
• B)the sum of the absolute values of price elasticities of the US demand for imports and the foreign demand for US exports is less than one.
• C)the sum of the absolute values of price elasticities of the US supply of exports and the foreign supply of imports is greater than one.
• D)the sum of the absolute values of price elasticities of the US supply for imports and the foreign demand for US exports is less than one.

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Definitions:

Society

A group of individuals involved in persistent social interaction, or a large social group sharing the same geographical or social territory, typically subject to the same political authority and dominant cultural expectations.

Formal Rules

Officially sanctioned guidelines and procedures that govern behavior within organizations or societies.

House

Usually refers to the lower chamber of a bicameral legislature, such as the House of Representatives in the United States Congress.

Senate

One of the two houses of the bicameral legislative body in the U.S. federal government, composed of representatives from each state.