The Marshall-Lerner Condition Holds That a Country's Current Account Balance

question 96

Multiple Choice

The Marshall-Lerner condition holds that a country's current account balance will ________ in response to a real ________ in a nation's currency if the________.

• A) improve; depreciation; sum of the price elasticities of export and import demand exceeds 1
• B) worsen; depreciation; sum of the price elasticities of export and import demand exceeds 1
• C) improve; appreciation; sum of the price elasticities of export and import demand exceeds 1
• D) improve; appreciation; sum of the price elasticities of export and import demand exceeds 0
• E) worsen; depreciation; sum of the price elasticities of export and import demand exceeds 0

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Definitions:

Useful Reports

Reports that provide valuable information, aiding in decision-making or problem-solving processes.

Financial Gains and Losses

The increase (gains) or decrease (losses) in financial resources, often as a result of investments, business operations, or market fluctuations.

Monitor and Control

Processes involved in tracking a project's progress and making adjustments to ensure objectives are met efficiently.

Double-Entry Bookkeeping System

An accounting method that records every financial transaction in at least two accounts, ensuring that the accounting equation (assets = liabilities + owner's equity) remains balanced.