The Marshall-Lerner Condition Indicates That

question 11

Multiple Choice

The Marshall-Lerner condition indicates that

• A) if the sum of the price elasticities of the demand for imports and the demand for exports exceeds 1 the foreign exchange market will be stable.
• B) if the sum of the price elasticities of the demand for imports and the demand for exports exceeds 1 the foreign exchange market will be unstable.
• C) if the net differential between the price elasticities of the demand for imports and the demand for exports exceeds 1 the foreign exchange market will be stable.
• D) if the net differential between the price elasticities of the demand for imports and the demand for exports exceeds 1 the foreign exchange market will be unstable.

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