Empirical evidence regarding in the effects of currency depreciation on the balance of trade indicates that? A. depreciation generally improves the trade balance B. depreciation generally hurts the trade balanceC. no strong generalization is possible D. depreciation has no effect…
The shorter the ______ pass through period the ______ the desirable BOT effects of evaluation on quantities traded will appear ? A. sooner B. longer C. bigger D. smaller
Suppose that the United Kingdom devalues the pound if both exports and imports are written in terms of pounds then the United Kingdom balance of trade during a currency contract period ? A. improves B. worsensC. is unaffected D. falls…
If export contracts are written in terms of foreign currency and import contracts are denominated in domestic currency a depreciation of the dollar during the currency contract period ? A. should increase the dollar value of exports B. should not…
Complete currency pass through arises when a 10 percent depreciation in the value of the dollar causes U.S? A. import prices to fall by 10 percentB. import prices to rise by 10 percent C. export prices to rise by 10…
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…
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.…
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.…
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;…
The balance of trade can only worsen if income ____ relative to absorption ? A. increasesB. decreases C. does not change D. None of the above