Economics · International Trade
In foreign exchange management and international economics, what does the 'J-curve effect' signify?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The pattern showing that no global economy can maintain a trade surplus without continuous currency revaluation.
- 2The curve depicting long-term structural changes in a country's trade equilibrium under fixed exchange rates.
- 3The continuous sustainable earnings provided by primary commodity exports to a developing economy.
- 4A phenomenon where a country's trade deficit initially worsens after currency devaluation before eventually improving.✓
Correct answer
A phenomenon where a country's trade deficit initially worsens after currency devaluation before eventually improving.
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