1. What are some of the problems associated with using a currency devaluation to improve a country's trade balance and stimulate output (describe at least 4)?

1. Suppose the real exchange rate depreciates by 12%. For each of the following cases, explain whether the Marshall-Lerner condition holds
   1. X increases by 4%, IM falls by 6%.
   2. X increases by 7%, IM falls by 4%.
   3. X increases by 5%, IM falls by 9%.
   4. X increases by 6%, IM falls by 7%