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 ?

Related Mcqs:

The notion that, following a currency depreciation the balance of trade falls for a while before increasing is called an effect ?

A. relative price B. elasticity C. J Curve D. Pass through...

The analysis considers the ability of domestic and foreign price of adjust to devaluation in the short run ?

A. pass through B. absorption C. adjustment mechanism D. currency contract period...

The balance of trade can only worsen if income ____ relative to absorption ?

A. increases B. decreases C. does not change D. None of the above...

The analysis considers the ability of domestic and foreign price of adjust to devaluation in the short run ?

A. pass through B. absorption C. adjustment mechanism D. currency contract period...

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 balance C. no strong generalization is possible D. depreciation has no effect on the trade balance...