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    Balance of Payments

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    Assume that a nation faces a balance of payments deficit with high unemployment. What exchange-rate adjustment can be made to resolve these problems?

    What if the nation experiences a balance of payment surplus with inflation - what exchange-rate adjustment can be made to resolve this problem?

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    https://brainmass.com/economics/exchange-rates/balance-payments-deficits-61637

    Solution Preview

    Exchange rate of the country can be strengthened by measures such as increasing interest rates to induce more foreign investment in the country and thereby, ...

    Solution Summary

    Exchange rate of the country can be strengthened by measures such as increasing interest rates.

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