2.5 - Balance of Payments Stability
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Practice Questions
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What is the balance of payments?
💡 Hint: Think of it as a financial ledger for the country.
What are the two main components of the balance of payments?
💡 Hint: They both track different types of transactions.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the primary purpose of the balance of payments?
💡 Hint: Think of it as a financial summary of international dealings.
True or False: A trade deficit is only bad for a country's economy.
💡 Hint: Consider how economies often grow at different paces.
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Challenge Problems
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A country has a consistent trade deficit of $200 million a year. Discuss potential policies the government might pursue to rectify this imbalance.
💡 Hint: Think about financial restrictions and how they can alter trade behaviors.
Evaluate the long-term effects on a nation's economy if its currency is continually depreciated due to balance of payments instability.
💡 Hint: Consider the ripple effect of currency value on consumer prices and international investment.
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