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Elasticities approach
1. The method of analyzing the determination of the balance of trade, especially due to a devaluation, that focuses on the price elasticities of exports and imports. According to this approach, the effect depends criticalliy on the Marshall-Lerner Condition.
2. The explanation of exchange rates using supply and demand curves.
Similar MatchesPrice elasticitiesPrice elasticities
The percentage change in quantity divided by a percentage change in the price. Answers the question: How much will the demand for my product decrease if I raise prices by 10%?
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