Post Utme Coal City University 2020 Economics Question 26

Practice objective / multiple choice question 26 from the 2020 Post Utme Coal City University Economics examination.

Post Utme Coal City University 2020 Economics Objective / Multiple Choice
Question 26 POST_UTME_COAL_CITY_UNIVERSITY • 2020 • ECONOMICS • objective

The Marshall-Lerner condition states that a country's balance of payments will improve if the sum of the percentage changes in its export and import prices exceeds the percentage change in its exchange rate. Which of the following countries is likely to experience an improvement in its balance of payments if the global economy experiences a recession?

Answer Options

A. Country A with a large trade deficit and a fixed exchange rate
Correct Answer B. Country B with a large trade surplus and a floating exchange rate
C. Country C with a small trade deficit and a fixed exchange rate
D. Country D with a large trade surplus and a fixed exchange rate
Correct Answer
B
Correct Option:
Country B with a large trade surplus and a floating exchange rate

About This Question

This is Post Utme Coal City University 2020 Economics Question 26. It is one of the objective questions from the 2020 Post Utme Coal City University Economics examination.

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