For this question,assume that the Marshall-Lerner condition does NOT hold.A reduction in the real exchange rate will tend to cause which of the following to occur?
A) a reduction in NX and a reduction in foreign output (Y*)
B) a reduction in NX and an increase in domestic output (Y)
C) an increase in NX and a reduction in Y
D) an increase in NX and an increase in Y
E) none of the above
Correct Answer:
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