Why the evidence did not improve the balance of trade

Reference no: EM13242212

In the floating rate model, a change in the exchange rate is supposed to adjust NX(net exports), until the economy reaches an equilibrium state. However, evidence shows that the exchange rate adjustment process takes years. Explain why the decline in the value of the $ from 2002 to 2008 did not improve the balance of trade (NX).

Reference no: EM13242212

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