Why Should the Balance of Payments Always Be Zero for Countries

question 9

Essay

Why should the balance of payments always be zero for countries with flexible exchange rates?

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Definitions:

Report

A document detailing the findings, outcomes, or conditions of a specific topic or investigation, often used to disseminate information.

Acquisition Price

The total cost incurred to acquire an asset, including the purchase price and all associated expenses such as brokerage fees, taxes, and installation costs.

Maturity Value

The amount to be received by the holder of a financial instrument at its maturity date, including the principal and any accrued interest.

De Minimis Benefit

A small or insignificant benefit provided by employers to employees that is tax-exempt, such as the occasional use of a company vehicle.