Which of the following does not represent an automatic adjustment in balance-of-payments disequilibrium? Variations in:
A) Domestic income
B) Foreign prices
C) Domestic prices
D) Foreign par values

Question

Quizplus · Accepted Answer

Foreign par values are fixed by governments and do not adjust automatically in response to balance-of-payments disequilibrium. The other options (domestic income, foreign prices, and domestic prices) can all lead to automatic adjustments in the balance of payments.

Which of the Following Does Not Represent an Automatic Adjustment