Question
Suppose in Dreamland import elasticity M = 0.5 and export elasticity X = 1.2. Currently, Export = 400 & Import = 500. a. To
Suppose in Dreamland import elasticity M = 0.5 and export elasticity X = 1.2. Currently, Export = 400 & Import = 500.
a. To restore trade balance is devaluation effective? Explain!
b. To restore the trade balance, government of Dreamland devaluated its currency by 5%. What would be the new trade balance after devaluation?
c. How much devaluation is needed to restore the trade balance?
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Intermediate Algebra
Authors: Margaret Lial, John Hornsby, Terry McGinnis
13th Edition
0134895983, 978-0134895987
