Post Utme Noun 2022 Economics Question 29

Practice objective / multiple choice question 29 from the 2022 Post Utme Noun Economics examination.

Post Utme Noun 2022 Economics Objective / Multiple Choice
Question 29 POST_UTME_NOUN • 2022 • ECONOMICS • objective

The Marshall-Lerner condition states that if the sum of the elasticities of demand for exports and 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 statement regarding the Marshall-Lerner condition?

Answer Options

A. A devaluation of the currency will lead to a decrease in the trade deficit.
Correct Answer B. A devaluation of the currency will lead to an increase in the trade surplus.
C. The Marshall-Lerner condition is only applicable to small open economies.
D. The Marshall-Lerner condition is only applicable to large open economies.
Correct Answer
B
Correct Option:
A devaluation of the currency will lead to an increase in the trade surplus.

About This Question

This is Post Utme Noun 2022 Economics Question 29. It is one of the objective questions from the 2022 Post Utme Noun Economics examination.

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