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A Currency Depreciation Usually Leads to a Short-Term Worsening of the Trade

Question 37

Multiple Choice

A currency depreciation usually leads to a short-term worsening of the trade balance followed by a trade balance improvement.This phenomenon is referred to as the


A) hysteresis effect
B) J-curve effect
C) purchasing power parity effect
D) exchange rate overshooting effect
E) sterilization effect

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