Question 2. 1. Consider the following open economy. C = co + c, (Y – T),c, > 0 1 = d, + d,Y, d, >0 IM = m,Ye,m, > 0 x,Y What is the relationship between export (import) and the real exchange rate, e, holding other things fixed? 2. What does the Marshall-Lerner condition tell you? Does this economy satisfy the condition?

Question 2. 1. Consider the following open economy. C = co + c, (Y – T),c, > 0 1 = d, + d,Y, d, >0 IM = m,Ye,m, > 0 x,Y What is the relationship between export (import) and the real exchange rate, e, holding other things fixed? 2. What does the Marshall-Lerner condition tell you? Does this economy satisfy the condition?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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