How Are Flexible Exchange Rates Used to Eliminate a Balance

question 8

Essay

How are flexible exchange rates used to eliminate a balance of payments deficit or surplus?

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Definitions:

Freud

Refers to Sigmund Freud, the founding father of psychoanalysis, a method for treating psychopathology and a theory which explains human behavior.

Jung

Refers to Carl Jung, a Swiss psychiatrist and psychoanalyst who founded analytical psychology, known for concepts such as the collective unconscious and archetypes.

Entropy Principle

A concept often related to thermodynamics and information theory, referring to the measure of disorder or randomness in a system. In psychology, it may relate to the complexity and unpredictability of human behavior and thought.

Differentiation Principle

In psychology, this refers to the process through which individuals develop a stronger sense of self by distinguishing themselves from others.