Post Utme Crawford University 2020 Economics Question 36

Practice objective / multiple choice question 36 from the 2020 Post Utme Crawford University Economics examination.

Post Utme Crawford University 2020 Economics Objective / Multiple Choice
Question 36 POST_UTME_CRAWFORD_UNIVERSITY • 2020 • ECONOMICS • objective

The Marshall-Lerner condition states that if the sum of the elasticities of demand for imports and exports is greater than 1, then a devaluation of the currency will lead to an improvement in the balance of payments. Which of the following scenarios would lead to a violation of the Marshall-Lerner condition?

Answer Options

A. The sum of the elasticities of demand for imports and exports is 1.3
Correct Answer B. The sum of the elasticities of demand for imports and exports is 0.3
C. The sum of the elasticities of demand for imports and exports is 1.8
D. The sum of the elasticities of demand for imports and exports is 0.8
Correct Answer
B
Correct Option:
The sum of the elasticities of demand for imports and exports is 0.3

About This Question

This is Post Utme Crawford University 2020 Economics Question 36. It is one of the objective questions from the 2020 Post Utme Crawford University Economics examination.

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