Large inflow of foreign reserves, which may cause appreciation of exchange rate, can render most products of that country lose competitiveness in export market. Such phenomenon is known as:
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1 mark, −0.33International EconomicsBalance of payments and exchange ratesBalance of payments disequilibrium and adjustmentModerateabout 1 min
UoH 2017 Question 16: Balance of payments and exchange rates
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What this question tests
This question is on Balance of payments disequilibrium and adjustment, part of Balance of payments and exchange rates in International Economics.
What causes a deficit or surplus and how it is corrected.
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