The price elasticity of demand for Canadian imports is 1.2, and the price elasticity of demand for Canadian exports is 1.8. What is the net effect on Canada's trade balancewhen the Canadian dollar depreciates by 10%? (It would be a good idea to save the answer, you may need it later)

The price elasticity of demand for Canadian imports is 1.2, and the price elasticity of demand for Canadian exports is 1.8. What is the net effect on Canada's trade balance when the Canadian dollar depreciates by 10%? (It would be a good idea to save the answer, you may need it later) Effect of 10% Canadian Dollar Depreciation on Canada'sTrade Balance Change in Change in Change in Sector C$ price US$ price Quantity Net Effect (E) Elasticity Import 1.2 Export 1.8 O The trade balance improves by 18% because the inflows fall 2% and the outflows rise 18% O The trade balance improves by 16% because the inflows fall 12% and the outflows rise 4% O The trade balance improves by 18% because outflows rise by 18% O The trade balance improves by 20% because the inflows fall 2% and the outflows rise 18% O The trade balance improves by 16% because the inflows fall 2% and the outflows rise 18%