A-LevelEconomicsInternational economic issues9708/12 · May/June 2022 · Q241 Mark
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?
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Aprice elasticity of demand for exports: 0.3, price elasticity of demand for imports: 0.3
Bprice elasticity of demand for exports: 0.2, price elasticity of demand for imports: 0.9
Cprice elasticity of demand for exports: 0.6, price elasticity of demand for imports: 0.5
Dprice elasticity of demand for exports: 1.2, price elasticity of demand for imports: 1.2
✓ Correct answer
A: price elasticity of demand for exports: 0.3, price elasticity of demand for imports: 0.3
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