In an economy that allows its currency to ﬂoat freely, the balance of payments account needs to be adjusted for oﬃcial ﬁnancing.

Name: In an economy that allows its currency to ﬂoat freely, the balance of payments account needs to be adjusted for oﬃcial ﬁnancing.
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Question

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In an economy with a freely floating currency, the balance of payments automatically adjusts through changes in the exchange rate, without the need for official financing.

In an Economy That Allows Its Currency to ﬂOat Freely