Exchange Rates and the Balance of Payments (id: 2aeb41f82)

本题目来源于试卷: Exchange Rates and the Balance of Payments，类别为 IB经济学

[单选题]
Depreciation of curren70a2m(m x8 bhqcdf( jscy *7 dsyoo- dsi/will help improve the balance of trade (BOT) if:

	Price elasticity of demand (exports)	Price elasticity of demand (imports)
A.	0.6	0.3
B.	0.5	0.6
C.	0.3	0.7
D.	0.5	0.5

A.
B.
C.
D.


参考答案:  B


本题详细解析:

B

$\underset{‾}{\text{Explanation}}$:
The Marshall-Lerner condition (MLC) states that if the sum of elasticities of demand for exports and imports exceeds 1, currency depreciation will improve the BOT.

Options A, C, and D are incorrect as they don't satisfy the MLC:

• Option A: $PEDx+PEDm=0.9$
• Option C: $PEDx+PEDm=1$
• Option D: $PEDx+PEDm=1$

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