What is a balance-of-payments surplus?
What will be an ideal response?
A balance-of-payments surplus arises when imbalances in the combined current account and capital and financial account result in an increase in official reserves. In this case, the nation’s treasury or central bank sells its currency to purchase foreign currency, which it adds to its stock of official reserves. The net purchase of official reserves shows up as a subtraction (?) from the foreign purchases of U.S. assets item because they are a debit or outflow of a nation’s currency. The increase in official reserves ensures that the balance of payments sum to zero.
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Before they can be used in regular exchanges, the assets that make up M2 must often
A) be paid off if they are credit cards. B) be converted to M1 assets. C) have their interest computed. D) have reached term if they are insurance policies.
An increase in the unemployment rate may be represented as a movement from a point on the production possibilities frontier to a point inside the frontier
Indicate whether the statement is true or false