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22 May, 03:30

If a nation has a balance of payments deficit and exchange rates are flexible, the price or value of that nation's currency in the foreign exchange markets will rise. true or false

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  1. 22 May, 03:51
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    False

    Explanation:

    A nation's currency strength is dependent on how much it's goods are in demand. If there is high demand for a countrie's goods it also follows that there will be high demand for its currency so it will be stronger.

    When there is a balance of payment deficit a country is importing more and borrowing from other countries to buy imports. So it's currency will weaken.
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