Which of the Following Would Increase the Current Account of Country

question 74

Multiple Choice

Which of the following would increase the current account of Country X? Country Y is Country X's sole trading partner.

• A) Inflation increases in countries X and Y by comparable amounts.
• B) Country X's and Country Y's currencies depreciate by the same amount.
• C) Country X imposes tariffs on imports from Country Y, and Country Y retaliates by imposing an identical tax on X's exports.
• D) The central banks of Country X and Country Y reduce the money supply to increase interest rates.
• E) Country X imposes a quota on imports, and Country Y retaliates by imposing an identical quota on X's exports.

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Definitions:

Marginal Revenue Curve

Represents the additional income gained from selling one more unit of a product or service, crucial for determining optimal production levels in microeconomics.

Marginal Cost

The boost in aggregate costs that comes from generating one extra unit of a product or service.

Non-collusive Oligopolist

An oligopolistic market structure participant that competes without agreements or cooperation with rivals to influence market prices or output.

Marginal Revenue Curve

Represents the change in total revenue from selling one additional unit of a product or service.