3850EconomicsMedium
The J-curve effect refers to the observation that?
AGDP usually decreases before it increases after a currency depreciation
Bthe trade balance usually gets worse before it improves after a currency depreciation
CGDP usually decreases before it increases after a currency appreciation
Dthe trade balance usually gets better before it gets worse after a currency appreciation
Correct answer
B. the trade balance usually gets worse before it improves after a currency depreciation
Explanation
The correct answer is the trade balance usually gets worse before it improves after a currency depreciation.