WAEC Economics 2024 Objective — Question 45

Question 45 of 50 from the West African Examinations Council (WAEC) Economics 2024 Objective paper, with the correct answer and a full explanation.

45. Devaluation of currency will help to correct a balance of payments deficit if a country's

A. exports have perfectly inelastic demand.
B. imports have inelastic demand.
C. exports have elastic demand.Correct
D. productivity is low.

Explanation

Devaluation only helps correct a balance of payments deficit if the elasticity of demand for the country's exports is elastic. Devaluation makes the country's goods cheaper, encouraging more people to buy them.

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