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If Countries Attempt to Achieve Similar Rates of Economic Growth

Question 34

Multiple Choice

If countries attempt to achieve similar rates of economic growth through demand management policy, for which of the following reasons may the equilibrium rate of exchange change over the longer term?
(i) The marginal propensity to import differs from one country to another.
(ii) The relative income elasticities of demand for imports and exports differ from one country to another.
(iii) The rate of growth of productivity differs from one country to another.


A) (i) and (iii)
B) (ii)
C) (i) and (ii)
D) (ii) and (iii)
E) (i) , (ii) and (iii)

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