stores of hard currencies. A deficit in the BOP implied an excess supply of the country’s currency on
world markets, and the government would then either devalue the currency or expend its ocial reserves
to support its value. But the transition to floating exchange rate regimes during the 1970s changed the
focus from the total BOP to its various sub-accounts like the current and financial account balances.
These are the indicators of economic activities and currency repercussions to come.
CHAPTER SUMMARY
■The measurement of the flow of funds as a result of all international economic transactions
between the residents ...
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