The improvement on a nation’s trade deficit resulting from a depreciation of its currency is ( ).
A. reinforced by the induced fall in imports
B. partly neutralized by the induced rise in imports
C. partly neutralized by the induced fall in imports
D. any of the above
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The mint parity refers to the( )
A. gold export point
B. gold import point
C. equilibrium exchange rate
D. ratio of the price of a unit of gold in terms of the currency of two nations
Which of the following regarding the adjustment under gold standard is true( )
A. the exchange rate is determined by demand and supply between the gold points and is prevented from moving outside the gold points by gold shipments
B. exchange rates between two nations can fluctuate freely under gold standard
C. It shows that a nation should attempt to continuously accumulate gold
D. all of the above
A foreign exchange market is unstable if the supply curve is positively sloped and less elastic () than the demand curve of foreign exchange. ()
The Marshall–Lerner condition indicates a stable foreign exchange market if the sum of the price elasticities of the demand for imports and the demand for exports0, in absolute terms, is less than 1. ()