The Hysteresis Effect Suggests That After a Long and Persistent

question 12

Multiple Choice

The hysteresis effect suggests that after a long and persistent overvaluation of the U.S.dollar

• A)foreign central banks are likely to intervene in the foreign exchange market in an effort to depreciate the dollar again
• B)there will be a change in trade patterns that will last even after the value of the dollar has come down
• C)foreign firms will initially gain market shares from U.S. firms but will lose them as soon as the dollar starts to depreciate again
• D)a depreciation of the dollar will initially lower net exports but the trend will soon reverse and the trade balance will ultimately improve
• E)none of the above

---

Definitions:

Narrative

A spoken or written account of connected events; a story.

Apologies

Expressions of regret or sorrow for having caused inconvenience, harm, or insult, often intended to repair social relations and convey remorse.

Acknowledgement

Recognition or acceptance of the truth or existence of something, often showing appreciation or confirmation.

Responsibility

A duty or obligation to satisfactorily perform or complete a task that one has accepted, or which is imposed by law, duty, or contractual agreement.