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Suppose the domestic elasticity of demand for imports is 0.76 and the foreign elasticity of demand for imports is 0.10. According to the Marshall-Lerner condition,

Suppose the domestic elasticity of demand for imports is 0.76 and the foreign elasticity of demand for imports is 0.10. According to the Marshall-Lerner condition, current account balance is expected to

a. increase.

b. decrease.

c. remain unchanged.

d. cannot be determined.

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