Exchange-Rate Adjustments And The Balance of

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

Economic theory predicts that a currency depreciation will least lead to an improvement in the home country’s trade balance when ?

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Economic theory predicts that a currency depreciation will least lead to an improvement in the home country’s trade balance when ?

A. home demand for imports is inelastic and foreign export demand is inelastic
B. home demand for imports is elastic and foreign export demand is inelastic
C. home demand for imports is inelastic and foreign export demand is elastic
D. home demand for imports is elastic and foreign export demand is elastic

Suppose that U.S dollar depreciates 70 percent against the yen yet Japanese export prices to Americans did not decrease by the full extent of the dollar depreciation. This is best explained by ?

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Suppose that U.S dollar depreciates 70 percent against the yen yet Japanese export prices to Americans did not decrease by the full extent of the dollar depreciation. This is best explained by ?

A. partial currency pass through
B. complete currency pass through
C. partial J curve effect
D. complete J curve effect