The J-Curve Effect Implies That in the Short Run a Currency

question 71

True/False

The J-curve effect implies that in the short run a currency depreciation will result in a balance of trade surplus for the home country.As time passes, however, the home country's balance of trade will move toward deficit.

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Definitions:

Slope Significant

An indicator that the slope of a regression line is significantly different from zero, suggesting a meaningful relationship between variables.

Correlation Coefficient

A numerical measure that indicates the extent to which two variables fluctuate together.

Linear Relationship

A type of correlation where changes in one variable are directly proportional to changes in another variable, often displayed as a straight line in a graph.

Simple Linear Regression

Regression analysis involving one independent variable and one dependent variable in which the relationship between the variables is approximated by a straight line.