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Does the marshall-lerner condition hold

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Reference no: EM131963486

1.) Suppose that εD = 0.667 and εFD = 0.75 for given country:

a) Are import demands elastic or inelastic in this case?

b) Does the Marshall-Lerner condition hold? How do you know?

c) Suppose that domestic price of this country's imports rise by 10% following a devaluation. What will happen to the quantity that it imports?

Reference no: EM131963486

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