Question
Which of the following best explains why the
J-curve effect occurs?Solution
The J-curve effect occurs because import and export contracts are fixed in the short-term causing delayed adjustments. J Curve refers to a change in the country’s balance of trade , often following a currency devaluation or depreciation. A weak currency means that imports will be costly, while it will be more profitable to export commodities. The imbalance leads to a fall in the current account, hence a smaller surplus or a bigger deficit. Immediately after the devaluation of a currency, there will be a lag in changing the consumption of imports. The demand for expensive imports and the demand for cheaper exports will be unchanged in the short run, as consumers look for cheaper alternatives.
Read the given statements and conclusions carefully. Assuming that the information given in the statements is true, even if it appears to be at varianc...
Statements:Some pastries are cakes.
No cake is a pudding.
All puddings are sweets.
Conclusions:I. Some sweets are not cakes.
Statements: Some tigers are lions.
No lion is a leopard.
Some leopards are Fox.
In the questions given below there are four statements followed by three conclusions I, II and III. You have to take the four given statements to be tr...
In the questions given below there are three statements followed by three conclusions I, II and III. You have to take the three given statements to be ...
Statements: Some hawk are cuckoo.
All cuckoo are duck.
Conclusions: I. some hawk ...
Statement:
All petrol are diesel.
Only a few petrol are coal.
Some diesel are kerosene.
Conclusion:
All coal be...
Statement:
Some Sparrow are Crow.
Only a few Eagles are Sparrow.
Only a few Sparrows are Peacock.
Only Sparrows are Parrot...
Statements: No data is a number.
Some numbers are not letters.
Only letters are consonants.
Conclusions: I. All letters may be co...
Statements
Only a few A is B
No B is C
Only a few C is D
Some D is E
Conclusions:
I). No A is C
...