In the foreign exchange market,a balance of payments deficit is represented by:

Question

Quizplus · Accepted Answer

A balance of payments deficit is represented by an excess supply of dollars because it indicates that more dollars are being used to purchase foreign currencies (to pay for imports or invest abroad) than are being received from foreigners (from exports or incoming investments), leading to a surplus of dollars in the foreign exchange market.

In the Foreign Exchange Market,a Balance of Payments Deficit Is