A depreciation will begin to improve the trade balance immediately if
A. Imports and exports are responsive to the exchange rate changes.
B. Imports and exports are inelastic to the exchange rate changes.
C. Consumers exhibit brand loyalty and price inelasticity
D. b) and c)
Answer:A
A depreciation will begin to improve the trade balance immediately if
A. Imports and exports are responsive to the exchange rate changes. B. Imports and exports are inelastic to the exchange rate changes. C. Consumers exhibit brand loyalty and price inelasticity D. b) and c)