Author Question: The J-curve shows that, after a currency depreciation, A) the current account is likely to worsen ... (Read 65 times)

lidoalex · **on:** Jun 30, 2018

The J-curve shows that, after a currency depreciation,

A) the current account is likely to worsen before it improves.
B) the current account is likely to improve before it worsens.
C) the current account will remain unchanged after all adjustments have taken place.
D) the current account is difficult to change in the long run.

Question 2

After trade opens, the short run impact on the income of the variable factor will be

A) a decrease.
B) an increase.
C) zero.
D) indeterminate, depending on the consumption pattern of the owners of the variable factor.