The J-curve effect received wide attention when
A)the British trade balance worsened after a strengthening of the pound in 1967.
B)the British trade balance worsened after a devaluation of the pound in 1967.
C)the British trade balance improved after a devaluation of the pound in 1967.
D)none of the above

Question

Quizplus · Accepted Answer

The J-curve effect describes a situation where a country's trade balance initially worsens following a devaluation of its currency before eventually improving. This was observed with the British trade balance after the pound was devalued in 1967.

The J-Curve Effect Received Wide Attention When