Post Utme Christopher University 2021 Economics Question 26

Practice objective / multiple choice question 26 from the 2021 Post Utme Christopher University Economics examination.

Post Utme Christopher University 2021 Economics Objective / Multiple Choice
Question 26 POST_UTME_CHRISTOPHER_UNIVERSITY • 2021 • ECONOMICS • objective

The Marshall-Lerner condition states that a country's balance of payments will improve if the sum of the elasticities of demand for imports and exports is greater than 1. What is the implication of this condition for a country with an elasticity of demand for imports of 0.8 and an elasticity of demand for exports of 1.2?

Answer Options

A. The country's balance of payments will deteriorate.
Correct Answer B. The country's balance of payments will improve.
C. The country's balance of payments will remain unchanged.
D. The elasticity of demand for imports and exports must be equal for the condition to hold.
Correct Answer
B
Correct Option:
The country's balance of payments will improve.

About This Question

This is Post Utme Christopher University 2021 Economics Question 26. It is one of the objective questions from the 2021 Post Utme Christopher University Economics examination.

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