Economics Mcqs

Given a two-country world, suppose Japan devalues the yen by 20 percent and west German devalues the mark by 15 percent This result is a (an)?

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Given a two-country world, suppose Japan devalues the yen by 20 percent and west German devalues the mark by 15 percent This result is a (an)?

A. appreciation in the value of both currencies
B. depreciation in the value of both currencies
C. appreciation in the value of the yen against the mark
D. depreciation in the value of the yen against the mark

If foreign manufacturing costs and profit margins in response to a depreciation in the U.S dollar the effect of these actions is to ?

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If foreign manufacturing costs and profit margins in response to a depreciation in the U.S dollar the effect of these actions is to ?

A. shorten the amount of time in which the depreciation leads to smaller trade deficit
B. shorten the amount of time in which the depreciation leads to smaller trade surplus
C. lengthen the amount of time in which the depreciation leads to smaller trade deficit
D. lengthen the amount of time in which the depreciation leads to smaller trade surplus

Because of the J curve effect and partial currency pass through, a depreciation of the domestic currency tends to increase the size of a ?

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Because of the J curve effect and partial currency pass through, a depreciation of the domestic currency tends to increase the size of a ?

A. trade surplus in the short run
B. trade surplus in the long run
C. trade deficit in the short run
D. trade deficit in the long run

According to the Marshall-Lerner condition if a country’s currency depreciates its trade balance will worsen if ?

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According to the Marshall-Lerner condition if a country’s currency depreciates its trade balance will worsen if ?

A. elasticity of demand for exports = 0.9; elasticity of demand for imports = 0.4
B. elasticity of demand for exports = 0.7; elasticity of demand for imports = 0.3
C. elasticity of demand for exports = 0.5; elasticity of demand for imports = 0.7
D. elasticity of demand for exports = 0.3; elasticity of demand for imports = 0.6

Which approach predicts that is an economy operates a full employment and faces trade deficit currency devaluation will improve the trade balance only if domestic spending is cut thus freeing resources to produce exports ?

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Which approach predicts that is an economy operates a full employment and faces trade deficit currency devaluation will improve the trade balance only if domestic spending is cut thus freeing resources to produce exports ?

A. the absorption approaches
B. the Marshall Lerner approach
C. the monetary approach
D. the elasticities approach