When the Marshall-Lerner condition does not hold, does a country’s current account deficit improves or worsens...
When the Marshall-Lerner condition does not hold, does a country’s current account deficit improves or worsens with a depreciation of the currency?
Homework Answers
If marshell learner condition do not hold then a currency which is depreciated then it's current account deficit worsense because imports will become more expensive and exports will become cheaper so that we will receive less foreign currency
Marshall learner condition states that when currency depreciates demand for imports will decrease and exports will increase when elasticity of demand is greater than 1
If marshell learner condition do not hold then a currency which is depreciated then it's current account deficit worsense because imports will become more expensive and exports will become cheaper so that we will receive less foreign currency
Marshall learner condition states that when currency depreciates demand for imports will decrease and exports will increase when elasticity of demand is greater than 1
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When the Marshall-Lerner condition does not
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