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Economics (AS & A Level) · May / June 2026 · Paper 34 · Question 27

9708Exchange rates

A country devalues its currency on the foreign exchange market. Its current account balance on the balance of payments worsens in the short run, but improves in the long run. What does this illustrate?

  1. Athe J curve
  2. Bthe Kuznets curve
  3. Cthe Laffer curve
  4. Dthe Lorenz curve

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Correct answer: A. the J curve

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