More important than the absolute size of a country's balance-of-payments disequilibrium
A)is the nature and cause of the disequilibrium.
B)is whether it is a trade surplus or deficit.
C)is whether the local government is mercantilist or not.
D)Nothing is more important than the absolute size of a country's balance-of-payments disequilibrium.

Question

Quizplus · Accepted Answer

The nature and cause of the disequilibrium are more important than the absolute size because they determine the potential effects on the economy and the appropriate measures needed to correct the imbalance. For example, a large deficit caused by excessive government spending may require different policy solutions than a deficit caused by a decline in exports due to global economic conditions.

More Important Than the Absolute Size of a Country's Balance-Of-Payments