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What is BOP equilibrium?

Updated: 9/14/2023
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Q: What is BOP equilibrium?
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Why balance to payment equilibrium importance to economics?

Balance of Payment is an important index which reflects the true economic position of a country in a given period, whether the country is a creditor country or a debtor country, and whether its currency is rising or falling in its external value. In other words, BoP is an important indicator of pressure on a country's foreign exchange rate.The BoP helps to forecast a country's market potential, especially in the short run.Changes in a country's BoP may signal the imposition or removal of controls over payment of dividends and interest, license fees, royalty fees or other cash disbursements to foreign firms or investors.


What are the main causes balance of payments deficits?

the main causes fo balane of payments deficits: BOP = CA + KA + ORT =0 OR: BOP = CA + KA = 0 BOP = CA = X-M = 0 in the case, BOP deficits means that X-M<0 or X<M TB = - => the expense on import is larger than income we get from export.


When a surplus of a product will arise when price is above equilibrium or below equilibrium?

above equilibrium


The price of peanut butter rises due to a blight on the peanut crop. peanut butter and jelly are complements. What happens to the equilibrium quantity and price of jelly?

(A)Equilibrium price falls, equilibrium quantity increases (B) Equilibrium price rises, equilibrium quantity falls (C) Equilibrium price falls, equilibrium quantity falls (D) Equilibrium price rises, equilibrium quantity rises


What does equilibrium?

Equilibrium is the point where demand = supply