Post Utme Redeemers University 2024 Economics Question 11

Practice objective / multiple choice question 11 from the 2024 Post Utme Redeemers University Economics examination.

Post Utme Redeemers University 2024 Economics Objective / Multiple Choice
Question 11 POST_UTME_REDEEMERS_UNIVERSITY • 2024 • ECONOMICS • objective

The Marshall-Lerner condition states that a country's balance of payments will improve if the sum of the elasticities of demand for imports and exports exceeds 1. Which of the following scenarios would lead to an improvement in the balance of payments?

Answer Options

A. A 10% increase in the price of imports leads to a 5% decrease in imports.
B. A 5% increase in the price of exports leads to a 2% decrease in exports.
Correct Answer C. A 10% decrease in the price of imports leads to a 5% increase in imports.
D. A 5% decrease in the price of exports leads to a 2% increase in exports.
Correct Answer
C
Correct Option:
A 10% decrease in the price of imports leads to a 5% increase in imports.

About This Question

This is Post Utme Redeemers University 2024 Economics Question 11. It is one of the objective questions from the 2024 Post Utme Redeemers University Economics examination.

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