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Relationship between balance of payments and exchage rate system?
Wiki User
∙ 13y ago
The balance of payments describes the relationship of import, exports, and their payment transactions between countries. How these payments are made and their value is closely related to the exchange rate system. In general, the real rate of exchange between two countries depends on their price levels and these price levels may vary through trade and production. However, nominal exchange rates depend on the level of trade to provide currency because the relative value of currencies depends on how much of one country's currency can be used to buy the currency or products of another. In general, since the balance of payments reflects this relationship of transaction, it directly influences nominal exchange rates and indirectly affects real exchange rates through trade.
Wiki User
∙ 13y ago
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how can the stock exchage be defined ?
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What is the difference between business commerce trade?
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