In the early 1970s,the U.S. ran large balance of payments ________,causing an ________ dollar and an ________ German mark.

Question

Quizplus · Accepted Answer

A balance of payments deficit means that the country is importing more goods and services than it is exporting, resulting in a net outflow of currency. This leads to a decline in the value of the currency, in this case, the U.S. dollar. An overvalued currency means that it is priced higher than its actual value in the market, while an undervalued currency means the opposite. Therefore, an undervalued German mark is a consequence of the overvalued U.S. dollar.

In the Early 1970s,the U