According to the J-Curve Concept, There Are Multiple Potential Outcomes

question 84

Multiple Choice

According to the J-curve concept, there are multiple potential outcomes on the balance of payments from a currency depreciation.Which of the following is NOT one of those outcomes?

• A) The effects of a currency depreciation are transmitted primarily via the income adjusted mechanism.
• B) The effects of a currency depreciation are likely to be adverse or negative in the short run.
• C) In the long run, the effects of a currency depreciation are likely to be positive given favorable elasticity conditions.
• D) The effects of a currency depreciation may be influenced by offsetting devaluations made by other countries.

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