Attached problem

In Country A, the real exchange rate (a) = 1.3, the level of Exports (X) = 45, and the level of Imports (W) = 45. A 2% appreciation in the real exchange rate leads to a 30% change in HM and a 70% change in X. What should be the resultant proportional change in trade balance. if the Marshall-Lerner condition has to be satised in the economy of Country A? Proportional change in trade decit= |:|%. (Round your answer to two decimal places.) Country B is in a situation of trade surplus, but the output in the economy is below the natural level of output. The graph in Panel A depicts the current output and demand equilibrium in Country B. The graph in Panel B depicts the level of trade surplus in Country B. Y is the current level of output in Country B and Y' is its natural level of output. TB is the trade balance curve for Country B. Which of the following policy mixes are appropriate for Country B, if it wishes to increase its total output to Y', while maintaining a surplus trade balance? 0 A. Undertake policies for increasing government expenditure and keeping the real exchange rate unchanged. 0 B. Undertake policies for increasing govemment expenditure. 0 C. Undertake policies for increasing government expenditure and depreciating the real exchange rate. O D. Undertake policies for increasing government expenditure and the real exchange rate. Demand, Z Net Exports Panel A Y Y' Output, Y Panel B ,oe ISL