The "J Curve" Effect Describes

question 56

Multiple Choice

The "J curve" effect describes:

• A) the continuous long-term inverse relationship between a country's current account balance and the country's growth in gross national product.
• B) the short-run tendency for a country's balance of trade to deteriorate even while its currency is depreciating.
• C) the tendency for exporters to initially reduce the price of goods when their own currency appreciates.
• D) the reaction of a country's currency to initially depreciate after the country's inflation rate declines.