6.1.3 - Balance of Payments Surplus and Deficit
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Practice Questions
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What does the balance of payments record?
💡 Hint: Think about what types of financial interactions exist globally.
What happens when a country experiences a current account deficit?
💡 Hint: Consider how individuals might cover their expenses when they overspend.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does a current account deficit indicate?
💡 Hint: Think about a country’s spending and earning relationships.
True or False: Errors and omissions help adjust inaccuracies in the BoP.
💡 Hint: Think about adjustments needed in accounting.
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Challenge Problems
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Consider a country that has a current account deficit of $20 million and a capital account surplus of $20 million. Discuss the long-term implications if this trend continues.
💡 Hint: Reflect on how households manage long-term debts and spending.
Analyze how errors and omissions might impact a country's economic policies if they consistently show larger discrepancies.
💡 Hint: Think about the importance of accurate data in decision-making for governments.
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