Post Utme Skyline University 2021 Economics Question 21

Practice objective / multiple choice question 21 from the 2021 Post Utme Skyline University Economics examination.

Post Utme Skyline University 2021 Economics Objective / Multiple Choice
Question 21 POST_UTME_SKYLINE_UNIVERSITY • 2021 • 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. What is the implication of this condition for a country with an elasticity of demand for imports of 0.8 and an elasticity of demand for exports of 1.2?

Answer Options

A. The country's balance of payments will worsen.
Correct Answer B. The country's balance of payments will improve.
C. The country's balance of payments will remain unchanged.
D. The country's balance of payments will worsen if the elasticity of demand for imports increases.
Correct Answer
B
Correct Option:
The country's balance of payments will improve.

About This Question

This is Post Utme Skyline University 2021 Economics Question 21. It is one of the objective questions from the 2021 Post Utme Skyline University Economics examination.

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