A country lowers the value of its currency to improve the current account of its balance of payments. The effect of this policy is shown. What is the most likely reason for the shift from X to Y?
- AThe combined income elasticity of demand for exports and imports is +2.0.
- BThe combined income elasticity of demand for exports and imports is +0.2.
- CThe combined price elasticity of demand for exports and imports is –2.0.
- DThe combined price elasticity of demand for exports and imports is –0.2.