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Assume the United States has the following import export volumes and prices It undertakes a major devaluation of the dollar say 18% on average against all major trading partner currencies

Assume the United States has the following import/export volumes and prices. It undertakes a major "devaluation" of the dollar, say 18% on average against all major trading partner currencies. What is the pre-devaluation and post-devaluation trade balance? Initial spot exchange rate ($/fc)...........................2.00 Price of exports, dollars ($)............................20.0000 Price of imports, foreign currency (fc)...............12.0000 Quantity of exports, units..................................100 Quantity of imports, units..................................120 Percentage devaluation of the dollar.................18.00% Price elasticity of demand, imports.....................-0.90

Apr 10 2020 View more View Less

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