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Tuesday 11 March 2014

Unit 4: Weak currency increases trade deficit in Japan

I read an interesting article in 7 Days this morning about Japan's current account deficit. It highlights the issue of a weak currency actually contributing to a larger trade deficit. Click here for a bloomberg news article on the subject. (Excellent evaluative article on currency and trade deficit)

Q) Why would a weak currency make a trade deficit worse?

I welcome any comments.

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