A country has a balance of trade deficit. When will this be least likely to be improved as a result of a depreciation of its currency?

if it is currently operating with a significant amount of unused resources

if the sum of the price elasticities of demand for exports and imports is less than 1

if in the long term, the price elasticity of demand for exports should increase

if the country uses a relatively small proportion of imports in their production process

Economics

IGCSE&ALevel

CAIE

Exam No：9708_s21_qp_13 Year：2021 Question No：25

Answer:

11.2.5 the effects of changing exchange rates on the external economy using Marshall-Lerner and J curve analysis

6.5.2 effect of fiscal, monetary, supply-side and protectionist policies on the current account

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