If the import elasticity is 1.3, which of the following is true?
Group of answer choices
The import elasticity is relatively elastic so the impact on the CAB is ambiguous and unclear without more information.
Because the import elasticity is elastic, a currency devaluation will clearly increase the CAB and reduce and deficits.
Because the import elasticity is elastic, a currency devaluation will clearly worsen the CAB and increase a CAB deficit.
The import elasticity is relatively inelastic so the impact on the CAB is ambiguous and unclear without more information.