Given a two-country world, suppose Japan devalues the yen by 20 percent and west German devalues the mark by 15 percent This result is a (an)?

A. appreciation in the value of both currencies
B. depreciation in the value of both currencies
C. appreciation in the value of the yen against the mark
D. depreciation in the value of the yen against the mark

Complete currency pass through arises when a 10 percent depreciation in the value of the dollar causes U.S?

A. import prices to fall by 10 percent
B. import prices to rise by 10 percent
C. export prices to rise by 10 percent
D. export prices to fall by 10 percent

If export contracts are written in terms of foreign currency and import contracts are denominated in domestic currency a depreciation of the dollar during the currency contract period ?

A. should increase the dollar value of exports
B. should not have any effect on the dollar value of u.s imports
C. must increase the balance of trade
D. all of the above

Suppose that the United Kingdom devalues the pound if both exports and imports are written in terms of pounds then the United Kingdom balance of trade during a currency contract period ?

A. improves
B. worsens
C. is unaffected
D. falls for a while before increasing

The shorter the ______ pass through period the ______ the desirable BOT effects of evaluation on quantities traded will appear ?

A. sooner
B. longer
C. bigger
D. smaller

The balance of trade can only worsen if income ____ relative to absorption ?

A. increases
B. decreases
C. does not change
D. none of the above

According to the Marshall-Lerner condition if a country’s currency depreciates its trade balance will worsen if ?

A. elasticity of demand for exports = 0.9; elasticity of demand for imports = 0.4
B. elasticity of demand for exports = 0.7; elasticity of demand for imports = 0.3
C. elasticity of demand for exports = 0.5; elasticity of demand for imports = 0.7
D. elasticity of demand for exports = 0.3; elasticity of demand for imports = 0.6

Because of the J curve effect and partial currency pass through, a depreciation of the domestic currency tends to increase the size of a ?

A. trade surplus in the short run
B. trade surplus in the long run
C. trade deficit in the short run
D. trade deficit in the long run

The shift toward imperfectly competitive markets in domestic and international trade the concept of ?

A. official exchange rates
B. complete currency pass through
C. exchange arbitrage
D. trade adjustment assistance

The extent to which a change in the exchange rate leads to changes in import and export prices is known as the ?

A. j curve effect
B. marshall lerner effect
C. absorption effect
D. pass through effect