According to the Marshall-Lerner condition, currency depreciation will worsen a country's balance of trade if the country's elasticity of demand for imports plus the foreign demand elasticity for the country's exports exceeds 1.0.

Question

Quizplus · Accepted Answer

The Marshall-Lerner condition states that currency depreciation will improve a country's balance of trade if the sum of the elasticity of demand for imports and the elasticity of demand for exports exceeds 1.0.

According to the Marshall-Lerner Condition, Currency Depreciation Will Worsen a Country's