The ________________ Explains Why It May Take Up to Two

question 49

Multiple Choice

The ________________ explains why it may take up to two years for a currency depreciation to make significant reductions in a nation's trade deficit.

• A)J-curve effect
• B)pass-through
• C)Marshall-Lerner condition
• D)multiplier effect

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Definitions:

Perfectly Inelastic

Describes a situation in which the quantity demanded or supplied does not change in response to a change in price.

Relatively Inelastic

Relatively inelastic refers to a situation where the demand for a good or service changes little when its price changes; the percentage change in demand is smaller than the percentage change in price.

Perfectly Elastic

This term describes a situation in market economics where the quantity demanded or supplied responds infinitely to changes in price.

Relatively Elastic

Describes a situation where the quantity demanded or supplied changes significantly in response to a change in price.