When the central government runs a budget deficit and the economy has a trade deficit, we call it the J-curve.

Name: When the central government runs a budget deficit and the economy has a trade deficit, we call it the J-curve.
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Question

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The J-curve refers specifically to the short-term adjustment pattern of a country's trade balance after a currency devaluation, not the combination of a budget deficit and trade deficit.

When the Central Government Runs a Budget Deficit and the Economy