Question:
The real exchange rate is given by e = EP/P*, where e is the price of domestic goods in terms of foreign goods, E is the price of domestic currency in terms of foreign currency, P is the domestic price level, P* is the foreign price level. If the Indian Rupee depreciates vis-à-vis the Japanese Yen, and the Marshall-Lerner condition holds, then
The real exchange rate is given by e = EP/P*, where e is the price of domestic goods in terms of foreign goods, E is the price of domestic currency in terms of foreign currency, P is the domestic price level, P* is the foreign price level. If the Indian Rupee depreciates vis-à-vis the Japanese Yen, and the Marshall-Lerner condition holds, then
Updated On: Oct 1, 2024
- India's imports will increase.
- India's trade balance will improve.
- foreign demand for Indian goods will increase.
- foreign demand for Indian goods will decrease.
Hide Solution
Verified By Collegedunia
The Correct Option is B, C
Solution and Explanation
The correct option is (B): India's trade balance will improve. and (C): foreign demand for Indian goods will increase.
Was this answer helpful?
0
0
Top Questions on Inflation and unemployment
- Which of the following is NOT a source of data on unemployment in India?
- CUET (UG) - 2024
- Economics
- Inflation and unemployment
- Suppose expected inflation rate ($\pi^e_t$) of an individual is formed as:
$\pi^{e}_t = (1 − \theta) \overline{\pi} + \theta \pi_{𝑡−1}$
where, $\overline{\pi} $ is constant inflation rate, $\pi_{t−1}$ is previous year’s inflation rate, and $ 0 \leq \theta \leq 1$ is weight assigned to inflation rate at different points in time.
Then, which of the following is NOT CORRECT?- IIT JAM EN - 2024
- Macroeconomics
- Inflation and unemployment
- Consider the information given in the table below:
Year Unemployment Rate (in percent) Number of unemployed (in millions) Labour Force Participation Rate (in percent) 2010 15 30 70 2020 20 50 80
The percentage change in working-age population from 2010 to 2020 is __________ (rounded off to two decimal places).- IIT JAM EN - 2024
- Macroeconomics
- Inflation and unemployment
- Individuals who were either unemployed or out of labour force but had worked for at least 30 days over the reference year were included in the labour force by the NSSO in its labour force surveys. Under which one of the following classifications does the above procedure appear?
- IIT JAM EN - 2024
- Macroeconomics
- Inflation and unemployment
- Consider a short-run Phillips curve with a constant expected rate of inflation. If the aggregate demand decreases unexpectedly and the labour force remains the same, then what will happen to aggregate price and unemployment rate?
- IIT JAM EN - 2024
- Macroeconomics
- Inflation and unemployment
View More Questions
Questions Asked in IIT JAM EN exam
- Consider a Keynesian Cross Model with following features,
Consumption Function: C = C0 + b(Y-T)
Tax Function: T = T0 + tY
Income Identity: Y = C + I0 + G0
Where, C = Consumption; Y = Real Income; T = Tax; I = Investment;
G = Government Expenditure; b = Parameter; t = Tax Rate
(The subscript 0 (zero) indicates that the concerned variable is autonomous)
If b = 0.7 and t = 0.2, value of the Keynesian multiplier is ________ (round off to 2 decimal places).- IIT JAM EN - 2024
- Business cycles and economic models
- Using the following table,
Year Population of the Economy GDP of the Economy (in crore) 2010 20,000 25,000 2020 25,000 40,000
the average growth rate (compounded annually) of per capita GDP in an economy during the period 2010-2020 is ________ (in percent, round off to 2 decimal places).- IIT JAM EN - 2024
- Growth models
- GDPF = Gross Domestic Product at Factor Cost; GDPM = Gross Domestic Product at Market Price; NNPF= Net National Product at Factor Cost; C = Consumption; I = Investment; G = Government Expenditure; X = Export; M = Import; T = Tax; S = Saving; D = Depreciation; NIA = Net Income from Abroad
Which of the following expressions is/are CORRECT?- IIT JAM EN - 2024
- National Income Accounting
- Let a random variable X has mean $\mu_x$ and non-zero variance $ \sigma ^2 _x$, and another X random variable Y has mean $\mu_y$ and non zero variance $\sigma ^2 _y$. If the correlation Y coefficient between X and Y is $\rho$, then which of the following is/are CORRECT?
- IIT JAM EN - 2024
- Probability
- Consider two independent random variables: $X ∼ N(5, 4)$ and $Y~N(3, 2)$. If $(2X + 3Y)~N(\mu, \sigma ^2)$, then the values of mean ($\mu$) and variance ($\sigma ^2$) are
- IIT JAM EN - 2024
- Probability
View More Questions