The Marshall-Lerner Condition Suggests That Depreciation of the Swiss Franc

question 74

Multiple Choice

The Marshall-Lerner condition suggests that depreciation of the Swiss franc leads to a worsening of Switzerland's trade balance if the

• A) elasticity of demand for Swiss exports is 0.4 while the Swiss elasticity of demand for imports is 0.2.
• B) elasticity of demand for Swiss exports is 0.6 while the Swiss elasticity of demand for imports is 0.4.
• C) elasticity of demand for Swiss exports is 0.5 while the Swiss elasticity of demand for imports is 0.7.
• D) elasticity of demand for Swiss exports is 0.6 while the Swiss elasticity of demand for imports is 0.7.

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