söndag 29 januari 2017

The Balance of Payments problem

Imports = wealth comes into the country, claims on wealth go out.
Exports = wealth leaves the country, claims on wealth come in.

So which is more beneficial? A balance of payments deficit means that the value of what comes in is more than the value of what goes out. If that were not the case, the trade would not take place. There would be no reason for it.

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