When the United States moves upward along the J-curve,it is because a depreciation of the dollar is having the _____________ effect of _____________ the number of dollars spent on imports.

Question

Quizplus · Accepted Answer

When the value of the US dollar depreciates, imports become more expensive, which initially leads to an increase in spending on imports in the short run. However, as time goes by and domestic producers adjust to the higher prices of imports, the demand for foreign goods falls, and there is a reduction in the number of dollars spent on imports, resulting in an upward movement along the J-curve. This adjustment process takes place in the long run, making option A incorrect. Option C is wrong because the short-run effects of depreciation are the opposite of what is stated in it.

When the United States Moves Upward Along the J-Curve,it Is