If a Nation with a Balance-Of-Payments Deficit Is Willing and Able

question 52

True/False

If a nation with a balance-of-payments deficit is willing and able to initiate quick actions to increase export receipts and decrease import payments,the amount of international reserves needed will be relatively large.

---

Definitions:

Nominal Rate

The interest rate stated on a loan or investment agreement, not accounting for inflation or other factors that affect the real rate of return.

Compounded Monthly

Interest on an investment calculated each month and added to the principal, increasing the amount on which future interest is computed.

End-Of-Month Payments

Payments made at the conclusion of a calendar month, often relating to salaries, bills, or loans.

Compounded Quarterly

The process of calculating interest on both the initial principal and the accumulated interest over four periods within a year.