Post Utme Ksu 2019 Economics Question 21

Practice objective / multiple choice question 21 from the 2019 Post Utme Ksu Economics examination.

Post Utme Ksu 2019 Economics Objective / Multiple Choice
Question 21 POST_UTME_KSU • 2019 • ECONOMICS • objective

U\sing the Marshall-Lerner condition, determine the effect of a 10% devaluation of the naira on the balance of payments of Nigeria, assuming the price elasticity of demand for exports is 2 and the price elasticity of demand for imports is 1.5.

Answer Options

A. The devaluation will lead to an improvement in the balance of payments.
Correct Answer B. The devaluation will lead to a deterioration in the balance of payments.
C. The devaluation will have no effect on the balance of payments.
D. The devaluation will lead to a decrease in the trade deficit.
Correct Answer
B
Correct Option:
The devaluation will lead to a deterioration in the balance of payments.

About This Question

This is Post Utme Ksu 2019 Economics Question 21. It is one of the objective questions from the 2019 Post Utme Ksu Economics examination.

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