The Marshall-Lerner condition holds that a country's current account balance will ________ in response to a real ________ in a nation's currency if ________
A) improve; depreciation; sum of the price elasticities of export and import demand exceeds 1
B) worsen; depreciation; sum of the price elasticities of export and import demand exceeds 1
C) improve; appreciation; sum of the price elasticities of export and import demand exceeds 1
D) improve; appreciation; sum of the price elasticities of export and import demand exceeds 0
E) worsen; depreciation; sum of the price elasticities of export and import demand exceeds 0
A
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The Keynesian perspective considers changes to aggregate demand to be the cause of ____________ cycle fluctuations.
a. business b. production c. weather d. consumption
Which of the following would most likely increase the demand for peanut butter?
a. a decrease in the price of jelly, a good that is often used with peanut butter b. the discovery that excessive consumption of peanut butter is harmful to one's health c. crop failures that raise the price of peanuts d. the invention of a new product that consumers think is a good substitute for peanut butter
Which of the following helps low-income countries grow rapidly relative to high-income countries?
a. Low-income countries are in a better position to save a larger share of their income. b. Low-income countries can employ technologies and practices that have been successful in high-income countries. c. Low-income countries generally have legal systems that protect property rights and enforce contracts in a more evenhanded manner. d. Low-income countries generally have more favorable weather conditions.
A trade deficit means that net exports are positive
a. True b. False Indicate whether the statement is true or false