When a Country Must Make a Net Payment to Foreigners

question 59

Multiple Choice

When a country must make a net payment to foreigners because of a balance-of-payments deficit, the central bank of the country

• A)should do nothing.
• B)should run down its official reserve assets (e.g. gold, foreign exchanges, and SDRs).
• C)should borrow anew from foreign central banks.
• D)either b or c will work.

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