Q
According to the Marshall-Lerner condition if a country’s currency depreciates its trade balance will worsen if ?
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A
A. elasticity of demand for exports = 0.9; elasticity of demand for imports = 0.4
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B
B. elasticity of demand for exports = 0.7; elasticity of demand for imports = 0.3
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C
C. elasticity of demand for exports = 0.5; elasticity of demand for imports = 0.7
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D
D. elasticity of demand for exports = 0.3; elasticity of demand for imports = 0.6
Correct Answer:
D. D. elasticity of demand for exports = 0.3; elasticity of demand for imports = 0.6
