Post Utme Unilag 2017 Economics Question 1

Practice objective / multiple choice question 1 from the 2017 Post Utme Unilag Economics examination.

Post Utme Unilag 2017 Economics Objective / Multiple Choice
Question 1 POST_UTME_UNILAG • 2017 • ECONOMICS • objective

The Marshall-Lerner condition states that a country will benefit from a devaluation of its currency if the sum of the price elasticities of demand for imports and exports is greater than 1. What is the implication of this condition for a country with a price elasticity of demand for imports of 0.5 and a price elasticity of demand for exports of 1.2?

Answer Options

A. The country will benefit from the devaluation.
Correct Answer B. The country will not benefit from the devaluation.
C. The country's trade balance will improve.
D. The country's trade balance will worsen.
Correct Answer
B
Correct Option:
The country will not benefit from the devaluation.

About This Question

This is Post Utme Unilag 2017 Economics Question 1. It is one of the objective questions from the 2017 Post Utme Unilag Economics examination.

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