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

question 53

Multiple Choice

The Marshall-Lerner condition suggests that depreciation of the franc leads to a worsening of France's trade account if the:

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

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