The J- curve illustrates the effects of:

Question

Quizplus · Accepted Answer

The J-curve illustrates the effects of changes in the real exchange rate on the trade balance, specifically how a depreciation of the currency (an increase in the real exchange rate) may initially worsen the trade balance before eventually improving it. This is represented by a J-shaped curve on a graph where the vertical axis represents the trade balance (NX) and the horizontal axis represents the real exchange rate. The other answer choices are not accurate representations of what the J-curve illustrates.

The J- Curve Illustrates the Effects Of