Post Utme Bowen University 2022 Economics Question 36

Practice objective / multiple choice question 36 from the 2022 Post Utme Bowen University Economics examination.

Post Utme Bowen University 2022 Economics Objective / Multiple Choice
Question 36 POST_UTME_BOWEN_UNIVERSITY • 2022 • ECONOMICS • objective

A country's balance of payments is in equilibrium when the value of its imports equals the value of its exports. However, if the country experiences a trade deficit, it must rely on foreign capital inflows to finance its imports. U\sing the Marshall-Lerner condition, derive an expression for the percentage change in the exchange rate that would be required to eliminate the trade deficit.

Answer Options

Correct Answer A. E = \frac{M_X + M_M}{E_X + E_M}
B. \frac{dS}{dE} = \frac{M_X - M_M}{E_X - E_M}
C. \frac{dS}{dE} = \frac{M_X + M_M}{E_X - E_M}
D. \frac{dS}{dE} = \frac{M_X - M_M}{E_X + E_M}
Correct Answer
A
Correct Option:
E = \frac{M_X + M_M}{E_X + E_M}

About This Question

This is Post Utme Bowen University 2022 Economics Question 36. It is one of the objective questions from the 2022 Post Utme Bowen University Economics examination.

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