4.2 Balance of payment

Question 1

freely floating exchange rates

Answer 1

The value of one currency expressed in terms of another, whose value is determined by the demand and supply of the currency

Question 2

government intervention

Answer 2

Intervention of the Central Bank to manage the exchange rates

Question 3

balance of payments

Answer 3

Record of all transactions between residents of the country and the residents of all other countries In a given year, total inflows (credits) must equal total outflows(debits)