A price-sensitive product like a car is more likely to see complete exchange rate pass-through than...
A price-sensitive product like a car is more likely to see complete exchange rate pass-through than a less price-sensitive product like gasoline or bread. True or False?
Homework Answers
The above statement is TRUE
Explanation
The car is more likely to see complete exchange rate pass through becasue Price - elasticity of demand is always more than the Bread and Gasoline.This is becasue the consumption or purchase of product like Car can be deferred for the future but essential product like bread cannot be Deffered.
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