Question:
What does the J Curve show?
Author: eric_galvaoAnswer:
-The Marshall Lerner Condition may work in the Long Run - the Current Account will improve if the Value Falls -But in the Short Run, the Current Account Deficit will probably Worsen, as it takes time for such changes to the Value to precipitate into the Economy - Contracts for example -The Overall Value of Exports falls, and the Value of Imports rises, so the CA Deficit Worsens.
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