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Students Zone - Revision Questions

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Chapter 3

Question 1

A devaluation will lead to a deterioration of the current account." Discuss this statement with reference to the elasticity approach to devaluation.

Question 2

"A devaluation will lead to a improvement in the current account." Discuss this statement with reference to the absorption approach to devaluation.

Question 3

"A devaluation will lead to a J-curve effect on the balance of payments." Discuss.

Question 4