Post Utme Ui 2022 Economics Question 21

Practice objective / multiple choice question 21 from the 2022 Post Utme Ui Economics examination.

Post Utme Ui 2022 Economics Objective / Multiple Choice
Question 21 POST_UTME_UI • 2022 • ECONOMICS • objective

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

Answer Options

Correct Answer A. A devaluation will lead to a decrease in imports and an increase in exports.
B. A devaluation will lead to an increase in imports and a decrease in exports.
C. A devaluation will lead to a decrease in imports and a decrease in exports.
D. A devaluation will lead to an increase in imports and an increase in exports.
Correct Answer
A
Correct Option:
A devaluation will lead to a decrease in imports and an increase in exports.

About This Question

This is Post Utme Ui 2022 Economics Question 21. It is one of the objective questions from the 2022 Post Utme Ui Economics examination.

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