Post Utme Nile University 2017 Economics Question 26

Practice objective / multiple choice question 26 from the 2017 Post Utme Nile University Economics examination.

Post Utme Nile University 2017 Economics Objective / Multiple Choice
Question 26 POST_UTME_NILE_UNIVERSITY • 2017 • ECONOMICS • objective

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

Answer Options

A. A devaluation will lead to an increase in imports and a decrease in exports.
Correct Answer B. A devaluation will lead to a decrease in imports and an increase in exports.
C. A devaluation will lead to an increase in imports and an increase in exports.
D. A devaluation will lead to a decrease in imports and a decrease in exports.
Correct Answer
B
Correct Option:
A devaluation will lead to a decrease in imports and an increase in exports.

About This Question

This is Post Utme Nile University 2017 Economics Question 26. It is one of the objective questions from the 2017 Post Utme Nile University Economics examination.

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