Post Utme Skyline University 2020 Economics Question 16

Practice objective / multiple choice question 16 from the 2020 Post Utme Skyline University Economics examination.

Post Utme Skyline University 2020 Economics Objective / Multiple Choice
Question 16 POST_UTME_SKYLINE_UNIVERSITY • 2020 • ECONOMICS • objective

U\sing the Marshall-Lerner condition, determine the effect of a 10% devaluation of the naira on the balance of payments of Nigeria, assuming the price elasticity of demand for exports is 2 and the price elasticity of demand for imports is 1.5.

Answer Options

A. The devaluation will lead to a surplus in the balance of payments.
Correct Answer B. The devaluation will lead to a deficit in the balance of payments.
C. The devaluation will have no effect on the balance of payments.
D. The devaluation will lead to a surplus in the current account and a deficit in the capital account.
Correct Answer
B
Correct Option:
The devaluation will lead to a deficit in the balance of payments.

About This Question

This is Post Utme Skyline University 2020 Economics Question 16. It is one of the objective questions from the 2020 Post Utme Skyline University Economics examination.

View More Post Utme Skyline University 2020 Economics Questions More Post Utme Skyline University Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support