Post Utme Pan Atlantic University 2023 Economics Question 31

Practice objective / multiple choice question 31 from the 2023 Post Utme Pan Atlantic University Economics examination.

Post Utme Pan Atlantic University 2023 Economics Objective / Multiple Choice
Question 31 POST_UTME_PAN-ATLANTIC_UNIVERSITY • 2023 • ECONOMICS • objective

The Marshall-Lerner condition states that a country will experience an improvement in its balance of payments if the sum of the percentage changes in its export and import prices exceeds the percentage change in its exchange rate. Which of the following scenarios would lead to an improvement in the balance of payments?

Answer Options

Correct Answer A. A 10% increase in export prices and a 5% decrease in import prices
B. A 5% decrease in export prices and a 10% increase in import prices
C. A 10% increase in export prices and a 10% increase in import prices
D. A 5% decrease in export prices and a 5% decrease in import prices
Correct Answer
A
Correct Option:
A 10% increase in export prices and a 5% decrease in import prices

About This Question

This is Post Utme Pan Atlantic University 2023 Economics Question 31. It is one of the objective questions from the 2023 Post Utme Pan Atlantic University Economics examination.

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