Question

The Marshall-Lerner Condition (ML

  • C is required for a currency devaluation/depreciation to improve a country's trade balance (Net Exports). The condition states that the sum of the absolute values of the price elasticities of demand for exports (η
  • M must satisfy which relationship?
  • X and imports (η
A ∣ηX∣+∣ηM∣>1
B ∣ηX∣+∣ηM∣=1
C ∣ηX∣+∣ηM∣<1
D ∣ηX∣×∣ηM∣>1
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