Ask Question
BusinessBusiness
28 November, 10:53

In a freely floating exchange rate system, if the current account is running a deficit, what are the consequences for the nation's balance on financial account and its overall balance of payments?

+2
Answers (1)
  1. 28 November, 13:08
    0
    If the current account is running in as deficit, the capital account must be running in a surplus equal to the same amount and thus the overall balance of the payments is same as before.

    Explanation:

    In a freely floating exchange rate system, the nation's balance of payments must always be zero.

    So if the current account is running in as deficit, the capital account must be running in a surplus equal to the same amount and thus the overall balance of the payments is same as before.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “In a freely floating exchange rate system, if the current account is running a deficit, what are the consequences for the nation's balance ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Theresa's Flower Garden has 750 bonds outstanding that are selling for $989 each, 2,500 shares of preferred stock with a market price of $47 a share, and 30,000 shares of common stock valued at $56 a share.
Answers (1)
The process of selection is limited to hiring new employees for job openings and excludes internal transfers and promotions. a. True b. False
Answers (1)
PackMan Corporation has semiannual bonds outstanding with nine years to maturity and the bonds are currently priced at $754.08. If the bonds have a coupon rate of 7.
Answers (1)
A possible drawback when buying an existing business is that:
Answers (1)
A magazine ad for Orville Redenbacher's PopCorn states that the sponsor's brand has three more cups of popcorn in every microwavable bag than PopSecret Popcorn.
Answers (1)
New Questions in Business
Southland Company is preparing a cash budget for August. The company has $17,000 cash at the beginning of August and anticipates $120,000 in cash receipts and $130,000 in cash disbursements during August.
Answers (1)
Amanda Company purchased a computer that cost $10,000. It had an estimated useful life of five years and a residual value of $1,000.
Answers (1)
Consumer surplus is a. the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it. b. the amount a buyer is willing to pay for a good minus the cost of producing the good. c.
Answers (1)
You've borrowed $20,000 on margin to buy shares in ixnay, which is now selling at $40 per share. your account starts at the initial margin requirement of 50%. the maintenance margin is 35%. two days later, the stock price falls to $35 per share. a.
Answers (1)
The length of a rectangle is twice the width the perimeter is 36 ft find length and width
Answers (1)
Home » Business » In a freely floating exchange rate system, if the current account is running a deficit, what are the consequences for the nation's balance on financial account and its overall balance of payments?
Sign Up Forgot Password?