When a depreciation in the nation's real effective exchange rate initially lowers the trade balance and then increases it, economists refer to the phenomenon as:
a. the K-curve effect.
b. the J-curve effect.
c. the real balances effect.
d. the marginal propensity to import.
Answer: b. the J-curve effect.
Economics
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What is the level of openness of the United States economy, based on 2016 data?
A. 13.3 percent B. 23.1 percent C. 52.0 percent D. 63.9 percent E. 77.8 percent
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Stagflation refers to a situation in which the economy is experiencing:
A. high economic growth and high inflation. B. low economic growth and high inflation. C. high economic growth and low inflation. D. low economic growth and low inflation.
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