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Marshall-Lerner Condition
The Marshall-Lerner condition predicts the circumstances in which a fall in the exchange rate improves the current account of the balance of payments. A devaluation of a currency improves the BoP only if the sum of price elasticities of demand for imports & exports are greater than one. (Condition is that: PedX + PedM > 1).
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Balance of Payments - Selection of Revision MCQs
Practice Exam Questions
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Effects of a Currency Depreciation
Topic Videos
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Brexit and the J Curve Effect
Topic Videos
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Balance of Payments Revision Webinar
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Exchange Rates Revision Webinar
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Exchange Rates (Online Lesson)
Online Lessons
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Explaining the J Curve
Topic Videos
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Exam Answer: Internal and External Devaluation
Study Notes
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Exchange Rates - Marshall Lerner Condition
Study Notes
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Can a currency depreciation lift Brazil out of recession?
9th December 2015