"The Balance of Payments Is Seldom in Balance in Practice

question 53

Essay

"The balance of payments is seldom in balance in practice." Discuss.

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Definitions:

Cram-Down Round

A financing event where existing shareholders see their stakes diluted due to new, often unfavorable funding accepted to prevent company failure.

Follow-On Investors

Investors who provide additional funding to a startup or company after the initial investment rounds, often to support continued growth.

Higher Valuation

Represents an increased assessment of a company's financial value based on its assets, earnings, and market potential.

Negative Cash Flows

A financial situation where a business or individual's outflows of cash exceed their incoming cash.