A country has a balance of trade deficit. In which circumstance would a depreciation of its currency be least likely to reduce this deficit?
- Aif it is currently operating with a significant amount of unused resources
- Bif the sum of the price elasticities of demand for exports and imports is less than 1
- Cif in the long term, the price elasticity of demand for exports should increase
- Dif the country uses a relatively small proportion of imports in their production process