A depreciation of the dollar will have its most pronounced impact on imports if the demand for imports is ?
Correct answer: C. elastic
- A. constant
- B. inelastic
- C. elastic
- D. Unitary elastic
Explanation
When import demand is elastic, a depreciation causes a relatively large change in the quantity of imports demanded, making its impact most pronounced. With inelastic demand, quantity changes only slightly.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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