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Assuming the Marshall-Lerner Condition Holds and Using the ZZ

Question 47

Essay

Assuming the Marshall-Lerner condition holds and using the ZZ / Y and NX graphs,illustrate graphically and explain what effect a real depreciation will have on output,exports,imports,and net exports.Clearly label all curves and clearly label the initial and final equilibria.

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A real depreciation will cause NX to ris...

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