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:

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...

The shift toward imperfectly competitive markets in domestic and international trade the concept of ?

A. official exchange rates B. complete currency pass through C. exchange arbitrage D. trade adjustment assistance...

The extent to which a change in the exchange rate leads to changes in import and export prices is known as the ?

A. J Curve effect B. Marshall Lerner effect C. absorption effect D. pass through effect...

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...