In a clearing agreement, when an imbalance occurs and one country owes money to the other, ____ are paid in an agreed upon hard currency.

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In a clearing agreement, a third party creates clearing accounts that represent trade credits for the perspective parties, and companies trade in and out as necessary. Under a clearing agreement, countries are likely to trade products up to a certain amount stated in a particular, commonly agreed upon hard currency and within a given time frame. When an imbalance occurs and one country owes money to the other swing credits are paid in an agreed upon hard currency known as the clearing currency.

In a Clearing Agreement, When an Imbalance Occurs and One