Post Utme Uniport 2019 Economics Question 31

Practice objective / multiple choice question 31 from the 2019 Post Utme Uniport Economics examination.

Post Utme Uniport 2019 Economics Objective / Multiple Choice
Question 31 POST_UTME_UNIPORT • 2019 • ECONOMICS • objective

The Marshall-Lerner condition states that if the sum of the elasticities of demand for imports and supply of 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 scenarios would lead to a violation of the Marshall-Lerner condition?

Answer Options

A. A 10% increase in the price of imports leads to a 5% decrease in imports
B. A 20% decrease in the price of exports leads to a 15% increase in exports
Correct Answer C. A 15% increase in the price of imports leads to a 10% decrease in imports
D. A 25% decrease in the price of exports leads to a 20% increase in exports
Correct Answer
C
Correct Option:
A 15% increase in the price of imports leads to a 10% decrease in imports

About This Question

This is Post Utme Uniport 2019 Economics Question 31. It is one of the objective questions from the 2019 Post Utme Uniport Economics examination.

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