2053EconomicsMedium
Because of the J curve effect and partial currency pass through, a depreciation of the domestic currency tends to increase the size of a?
Atrade deficit in the short run
Btrade surplus in the long run
Ctrade surplus in the short run
Dtrade deficit in the long run
Correct answer
D. trade deficit in the long run
Explanation
The correct answer is trade deficit in the long run.