A currency depreciation usually leads to a short-term worsening of the trade balance followed by a trade balance improvement.This phenomenon is referred to as the

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The J-curve effect states that in the short run, a currency depreciation leads to a worsening of the trade balance because the prices of imported goods rise and exports do not immediately respond. However, over time, the trade balance improves as exports become more competitive and imports become more expensive. This creates a J-shaped curve on a graph of the trade balance over time. The other options are either unrelated or do not accurately describe this phenomenon.

A Currency Depreciation Usually Leads to a Short-Term Worsening of the Trade