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Basic Question 8 of 15
According to the J-curve effect, when the exchange value of a country's currency depreciates, the country's trade balance ______
B. first moves toward surplus, then later toward deficit.
C. moves into surplus and stays there.
A. first moves toward deficit, then later toward surplus.
B. first moves toward surplus, then later toward deficit.
C. moves into surplus and stays there.
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I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
describe exchange rate regimes and explain the effects of exchange rates on countries' international trade and capital flows
CFA® 2025 Level I Curriculum, Volume 1, Module 7.