For this question, assume that the Marshall-Lerner condition does ...

[torybrooks]

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

Question 2

When a government reduces its deficits by increasing taxes, in the short run,
 
  A) output returns to potential.
  B) output increases.
  C) interest rate is higher.
  D) IS curve shifts inward to the left.

[Jayson]

Answer to Question 1

A

Answer to Question 2

A

[torybrooks]

Thank you

[Jayson]

No problemo