The existence of the J-curve suggests that a real depreciation ...

[armygirl]

The existence of the J-curve suggests that a real depreciation will cause
 
  A) an initial increase in net exports.
  B) an initial increase in economic activity.
  C) a final reduction in net exports.
  D) an initial reduction in the demand for domestic goods.

Question 2

For this question, assume that the economy is initially operating at the natural level of output. An increase in consumer confidence will cause
 
  A) a reduction in the real wage in the medium run.
  B) an increase in the real wage in the medium run.
  C) no change in the real wage in the medium run.
  D) ambiguous effects on the real wage in the medium run.

[katara]

Answer to Question 1

D

Answer to Question 2

C

[armygirl]

Thank you

[katara]

Happy to help you