When a nation's demand curve for imports in terms of the foreign currency is vertical:
A)the nation's demand curve for the foreign currency has zero elasticity
B)the nation's demand for the currency is elastic
C)the nation's supply of the currency is vertical
D)the other nation's demand for the nation's currency has zero elasticity

Question

Quizplus · Accepted Answer

When a nation's demand curve for imports in terms of the foreign currency is vertical, it means that the quantity demanded remains the same regardless of the price. Therefore, the demand curve for the foreign currency has zero elasticity, meaning that a change in the price of the currency will not cause any change in the quantity demanded.

When a Nation's Demand Curve for Imports in Terms of the Foreign