The table shows several possible pairings of a country’s price elasticity of demand for exports and price elasticity of demand for its imports. After the country’s currency is devalued, which pairing of elasticities would cause its balance of payments on the current account to deteriorate?
- 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