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For This Question,assume That the J-Curve Effect Exists

Question 9

Multiple Choice

For this question,assume that the J-curve effect exists.Which of the following will occur after a real appreciation?


A) The trade deficit will improve temporarily before it worsens.
B) The trade deficit will worsen temporarily before it improves.
C) The real exchange rate will fall temporarily before it rises.
D) The real exchange rate will rise temporarily before it falls.
E) none of the above

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