The effect of a depreciation of the domestic currency on the trade balance is likely to:
A) have little or not effect.
B) increase it in the short run and decrease it in the long run.
C) decrease it in the short and long runs.
D) decrease it in the short run and increase it in the long run.
E) not be consistent.

Question

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The Answer of The effect of a depreciation of the domestic currency on the trade balance is likely to:
A) have little or not effect.
B) increase it in the short run and decrease it in the long run.
C) decrease it in the short and long runs.
D) decrease it in the short run and increase it in the long run.
E) not be consistent.

The Effect of a Depreciation of the Domestic Currency on the Trade