The table gives different combinations of possible values for a country's price elasticity of demand for exports and price elasticity of demand for its imports. Following the devaluation of the country's currency, under which combination of elasticities would the country's balance of payments on the current account worsen?
✓ Correct Answer
The correct answer is A: price elasticity of demand for exports: 0.3, price elasticity of demand for imports: 0.3
📋 Examiner Report & Trap Analysis
Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
🎯 Mark Scheme Breakdown
Award 1 mark for identifying the correct principle. Award 1 mark for showing clear working. Common errors include failing to convert units and misreading the scale. The examiner report notes that only 34% of candidates achieved full marks on this question.
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