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When the supply curve slopes upwards the foreign exchange market Because import demand elasticities are larger in the short run than in the long run, instability is more likely in the The same conditions that cause short-run instability and long-run stability result in a J curve. The J curve shows that a depreciation can temporarily worsen the balance of trade, while an appreciat A country's balance of payments accounts The phenomenon of an initial worsening and subsequent improvement of the trade balance after a depreciation is k