The "J curve":
A) only occurs under fixed exchange rates.
B) occurs only when a currency is appreciating.
C) represents an initial worsening of the trade balance with devaluation.
D) never occurs in developing countries.
E) only occurs in developing countries.

Question

Quizplus · Accepted Answer

The "J curve" represents an initial worsening of the trade balance following a devaluation of a country's currency, before improving over time.

The "J Curve