The Marshall-Lerner Condition States That, All Else Equal

question 76

Multiple Choice

The Marshall-Lerner Condition states that, all else equal

• A) nominal appreciation improves the current account if export and import volumes are sufficiently elastic with respect to the real exchange rate.
• B) real depreciation improves the current account if export and import volumes are sufficiently inelastic with respect to the real exchange rate.
• C) real appreciation improves the current account if export and import volumes are sufficiently elastic with respect to the real exchange rate.
• D) real depreciation improves the current account if export and import volumes are sufficiently elastic with respect to the real exchange rate.
• E) the sum of import and export elasticities must be equal to one in order for depreciation to occur.

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Definitions:

Non Sequitur

A conclusion or statement that does not logically follow from the previous statement or argument, presenting a disconnect in reasoning.

Conclusion

The final part of an argument, statement, or text where the outcome or decision is derived from the previously presented information or arguments.

Premises

Statements or propositions on which an argument is based or from which a conclusion is drawn.

Begging the Question

A logical fallacy in which the conclusion of an argument is assumed in the premise, essentially arguing in a circle.