J-curve effects following a devaluation are simply a theoretical issue with no real world importance.
Indicate whether the statement is true or false
Question 2
All of the following are true about foreign direct investment (FDI) and portfolio investment EXCEPT
A) increases in the flow of portfolio investments increase the likelihood of financial crisis.
B) both portfolio investments and FDI are the same in that they both give their holders a claim on the future output of the foreign economy.
C) FDI is relatively illiquid compared to portfolio investment.
D) portfolio investments have been on the decline in recent years (or decades).
E) FDI investors must be willing to go through many ups and downs in order to benefit from their long-term investments.
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