Let elasticity of demand for exports for a certain country be ex and elasticity of demand for imports is em. Assume that the country devalues its currency. Its balance of payment will almost certainly show an improvement if: a) e => 1 b) ex = e = 1 c) ex = e <1 + e d) ex+em = 1

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Let elasticity of demand for exports for a certain country be ex and elasticity of demand
for imports is em. Assume that the country devalues its currency. Its balance of payment
will almost certainly show an improvement if:
a) ex = e, >1
b) ex = e = 1
:
c) ex = em <1
d) e₂ +
m
= 1
Transcribed Image Text:Let elasticity of demand for exports for a certain country be ex and elasticity of demand for imports is em. Assume that the country devalues its currency. Its balance of payment will almost certainly show an improvement if: a) ex = e, >1 b) ex = e = 1 : c) ex = em <1 d) e₂ + m = 1
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