Post Utme Unilag 2023 Economics Question 6

Practice objective / multiple choice question 6 from the 2023 Post Utme Unilag Economics examination.

Post Utme Unilag 2023 Economics Objective / Multiple Choice
Question 6 POST_UTME_UNILAG • 2023 • ECONOMICS • objective

The Marshall-Lerner condition states that if the sum of the elasticities of demand for exports and imports is greater than 1, then a devaluation of the currency will lead to an improvement in the balance of payments. What is the implication of this condition for a country with an elasticity of demand for exports of 0.8 and an elasticity of demand for imports of 1.2?

Answer Options

A. The country will experience a deterioration in its balance of payments
B. The country will experience no change in its balance of payments
Correct Answer C. The country will experience an improvement in its balance of payments
D. The country will experience a worsening of its trade deficit
Correct Answer
C
Correct Option:
The country will experience an improvement in its balance of payments

About This Question

This is Post Utme Unilag 2023 Economics Question 6. It is one of the objective questions from the 2023 Post Utme Unilag Economics examination.

View More Post Utme Unilag 2023 Economics Questions More Post Utme Unilag 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