Exchange rate and the balance of payments - The exchange rate and the balance of payments
5 important questions on Exchange rate and the balance of payments - The exchange rate and the balance of payments
Why does the FE market always clears?
When there is an inbalance in the FE market, in what three ways can this clear?
2. Delayment of payment, hence the inbalance is turned into debt
3. Central bank trades clear the market
What is meant by a Balance of Payments surplus, since BP=0 always holds?
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What variable is equal to BPsurplus?
What does an ideal system of flexible exchange rates compromise?
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