Economics 9708 · AS & A Level · 6.4

6.4 — practice question

If a country’s currency is devalued, in what circumstances is this most likely to lead to inflation in the country?

  • Adependence on imported raw materials high, price elasticity of demand for imports inelastic, price elasticity of demand for exports elastic
  • Bdependence on imported raw materials high, price elasticity of demand for imports elastic, price elasticity of demand for exports inelastic
  • Cdependence on imported raw materials low, price elasticity of demand for imports inelastic, price elasticity of demand for exports elastic
  • Ddependence on imported raw materials low, price elasticity of demand for imports elastic, price elasticity of demand for exports inelastic

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