Post Utme Rhema University 2023 Economics Question 21

Practice objective / multiple choice question 21 from the 2023 Post Utme Rhema University Economics examination.

Post Utme Rhema University 2023 Economics Objective / Multiple Choice
Question 21 POST_UTME_RHEMA_UNIVERSITY • 2023 • ECONOMICS • objective

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

Answer Options

A. A decrease in the price of imports and an increase in the price of exports
Correct Answer B. An increase in the price of imports and a decrease in the price of exports
C. A decrease in the price of imports and a decrease in the price of exports
D. An increase in the price of imports and an increase in the price of exports
Correct Answer
B
Correct Option:
An increase in the price of imports and a decrease in the price of exports

About This Question

This is Post Utme Rhema University 2023 Economics Question 21. It is one of the objective questions from the 2023 Post Utme Rhema University Economics examination.

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