Day: April 17, 2019

According to the Marshall-Lerner condition which of the following countries’ balance of trade will improve following a currency devaluation?

Select ONE answer:

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 4

1. -0.3 + -0.4 = 0.7, 0.7 <1
2. -0.3 + -0.7 =1,1=1
3. -0.7 + -0.1 = 0.8, 0.8 <1
4. Correct: -0.8 + -0.1 =1.1, 1.1 > 1

 

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