A country is experiencing a large current account deficit. Its government chooses to devalue its currency. Under which condition would this action reduce the deficit? (table shows price elasticity of demand for exports and imports)
- Aexports elasticity 0.0; imports elasticity 0.0
- Bexports elasticity 0.0; imports elasticity 0.5
- Cexports elasticity 0.5; imports elasticity 0.5
- Dexports elasticity 0.5; imports elasticity 1.0