The J Curve Implies That a Real Depreciation Will Cause

question 26

Multiple Choice

The J curve implies that a real depreciation will cause

• A)the nominal exchange rate to appreciate in the short run and depreciate in the long run.
• B)the nominal exchange rate to depreciate in the short run and appreciate in the long run.
• C)net exports to fall in the short run and rise in the long run.
• D)net exports to rise in the short run and fall in the long run.

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