4134EconomicsMedium
According to the Marshall-Lerner condition if a country’s currency depreciates its trade balance will worsen if?
Aelasticity of demand for exports = 0.9; elasticity of demand for imports = 0.4
Belasticity of demand for exports = 0.3; elasticity of demand for imports = 0.6
Celasticity of demand for exports = 0.7; elasticity of demand for imports = 0.3
Delasticity of demand for exports = 0.5; elasticity of demand for imports = 0.7
Correct answer
B. elasticity of demand for exports = 0.3; elasticity of demand for imports = 0.6
Explanation
The correct answer is elasticity of demand for exports = 0.3; elasticity of demand for imports = 0.6.