The J-curve effect of a currency depreciation results is due to
A) the initial effect having positive effects on the current account balance.
B) the value of imports increasing by more than the value of exports at the time of devaluation.
C) exports and imports being totally unresponsive to changes in exchange rates.
D) decreases in the dollar price of imports.
E) None of the above.
B
You might also like to view...
Consider the straight-line demand curve illustrated in the figure above. At a price of $6, demand is
A) inelastic. B) elastic. C) unit elastic. D) More information is needed to determine if the demand is elastic, unit elastic, or inelastic.
Under fixed exchange rate, in general which one of the following statements is the MOST accurate?
A) The following condition should hold for domestic money market equilibrium: Ms/P = L(R , Y). B) The following condition should hold for domestic money market equilibrium: Md/P = L(R , Y). C) The following condition should hold for domestic money market equilibrium: Ms = L(R , Y). D) The following condition should hold for domestic money market equilibrium: P = L(R , Y). E) The following condition should hold for domestic money market equilibrium: R*Md/P = L(Y).
Which of the following is not included in GDP?
A) Unpaid maintenance of your house by your spouse. B) Services such as those provided by lawyers and dentists. C) The estimated rental (imputed) value of owner-occupied housing. D) Production by foreign citizens in the U.S.
If the supply of and demand for loanable funds both shift left, which of the following necessarily happens?
a. the equilibrium interest rate falls b. the equilibrium interest rate rises c. the equilibrium quantity of loanable funds rises d. the equilibrium quantity of loanable funds falls