Trade Balance: A Depreciation of the Exchange Rate
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The aim of these questions is to look at the consequences of a depreciation of the exchange rate on the trade balance.
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Given the following settings, what happens to the trade balance if there is a 8% depreciation of the currency?; 
- PED of Imports = -0.3
- PED of Exports = -0.4
- Quantity of Imports = 14
- Quantity of Exports = 8
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