According to the Marshall-Lerner condition, which of the following countries' balance of trade will improve following a depreciation of its currency?
| Country | Price Elasticity of Demand for Exports (PEDxPED_xPEDx) | Price Elasticity of Demand for Imports (PEDmPED_mPEDm) |
|---|---|---|
| Arcadia | -0.35 | -0.55 |
| Belgravia | -0.45 | -0.65 |
| Cantonia | -0.25 | -0.70 |
| Danubia | -0.40 | -0.60 |
Arcadia
Belgravia
Cantonia
Danubia
30 exam-style questions on OCR A Level Economics Exchange rates. Each one has a worked solution and a mark scheme showing where the marks go.