Question:
What are the Consequnces of a BoP Surplus
Author: eric_galvaoAnswer:
-Surpluses means the Economy is Competitive -But if its done that for a long time, Japan, then Stagnation can experience. This means Supply for Domestic Conumsption is Low and Economic Activity halts -Overreliance on Exports -If its done [Surplus] via a Undervalued Currency, then Inflationary Pressure [Price of Imported Componets] will Rise making Price Levels rise as a result.
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