j- curve

• What does the J-curve illustrate regarding the current account?

  The J-curve shows that the current account will worsen before it improves.
• Why might people not immediately recognize that British exports are cheaper?

  It takes time for people to find a source for cheaper British exports.
• What is the impact on UK consumers regarding imports when prices rise?

  UK consumers may be unable to switch to alternatives immediately.
• How does demand behave in the short run according to the study material?

  Demand tends to be inelastic in the short run.
• What happens to the price and value of exports in the short run?

  The price of exports will fall, leading to a decrease in their value.
• What happens to the amount sold of exports and imports in the short run?

  The amount sold of each will stay the same in the short run.
• What is expected to happen to the current account deficit in the long term?

  The current account deficit will fall as demand becomes more elastic.
• What happens to the price and value of imports in the short run?

  The price of imports will rise, leading to an increase in their value.
• j curve diagram