Post Utme Delsu 2019 Economics Question 6

Practice objective / multiple choice question 6 from the 2019 Post Utme Delsu Economics examination.

Post Utme Delsu 2019 Economics Objective / Multiple Choice
Question 6 POST_UTME_DELSU • 2019 • ECONOMICS • objective

Consider a small open economy with a fixed exchange rate. The government imposes a tariff on imported goods, leading to a decrease in imports. U\sing the Marshall-Lerner condition, determine the effect on the balance of payments.

Answer Options

A. The balance of payments will improve due to the decrease in imports.
Correct Answer B. The balance of payments will worsen due to the decrease in imports.
C. The balance of payments will remain unchanged due to the fixed exchange rate.
D. The balance of payments will improve due to the increase in exports.
Correct Answer
B
Correct Option:
The balance of payments will worsen due to the decrease in imports.

About This Question

This is Post Utme Delsu 2019 Economics Question 6. It is one of the objective questions from the 2019 Post Utme Delsu Economics examination.

View More Post Utme Delsu 2019 Economics Questions More Post Utme Delsu Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support