Post Utme Noun 2017 Economics Question 11

Practice objective / multiple choice question 11 from the 2017 Post Utme Noun Economics examination.

Post Utme Noun 2017 Economics Objective / Multiple Choice
Question 11 POST_UTME_NOUN • 2017 • ECONOMICS • objective

The Marshall-Lerner condition states that if the sum of the elasticities of demand for exports and supply of imports is greater than 1, then 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

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

About This Question

This is Post Utme Noun 2017 Economics Question 11. It is one of the objective questions from the 2017 Post Utme Noun Economics examination.

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