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If a country has persistent trade deficits, which is likely to eventually happen in the market for ...

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If a country has persistent trade deficits, which is likely to eventually happen in the market for ...

If a country has persistent trade deficits, which is likely to eventually happen in the market for that country's currency if the country's central bank does not intervene?

▸ The demand curve for the currency shifts to the left resulting in an appreciation.

▸ The demand curve for the currency shifts to the right resulting in an appreciation.

▸ The demand curve for the currency shifts to the left resulting in a depreciation.

▸ The supply curve for the currency shifts to the left resulting in a depreciation.

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Macroeconomics

Edition: 3^rd

Authors: Acemoglu, Laibson, List

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