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Question #47731

The J-curve effect refers to the observation that ?

Options:

A) GDP usually decreases before it increases after a currency depreciation

B) the trade balance usually gets worse before it improves after a currency depreciation

C) the trade balance usually gets better before it gets worse after a currency appreciation

D) GDP usually decreases before it increases after a currency appreciation

Answer: The J-curve effect refers to the observation that the trade balance usually gets worse before it improves after a currency depreciation.

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