A depreciation of the dollar will have its most pronounced impact on imports if the demand for imports is:
A) Constant
B) Inelastic
C) Elastic
D) Unitary elastic

Question

Quizplus · Accepted Answer

When the demand for imports is elastic, consumers are more sensitive to changes in prices. Therefore, a depreciation of the dollar (making imports more expensive) will likely lead to a decrease in demand for imports. This will have a more pronounced impact on imports than if the demand for imports were constant or inelastic, as consumers would still continue to purchase the imports even with a price increase.

A Depreciation of the Dollar Will Have Its Most Pronounced