Post Utme Uniosun 2018 Economics Question 39

Practice objective / multiple choice question 39 from the 2018 Post Utme Uniosun Economics examination.

Post Utme Uniosun 2018 Economics Objective / Multiple Choice
Question 39 POST_UTME_UNIOSUN • 2018 • ECONOMICS • objective

The Marshall-Lerner condition states that if the sum of the elasticities of demand for imports and exports 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 an increase in imports and an increase in exports.
D. A devaluation will lead to a decrease in imports and a decrease 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 Uniosun 2018 Economics Question 39. It is one of the objective questions from the 2018 Post Utme Uniosun Economics examination.

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