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Assignment 2: International Balance of Payments

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For most goods and services bought and sold in a marketplace, prices are determined by supply and demand. Exchange rates are no different. Absent government or central bank interference, the supply of and demand for currencies determine their prices.

Do the following to complete this assignment:

  1. Explain the international balance of payments (BOP) and the reason for its use.
  2. Examine how surpluses and deficits in the balance of payments (BOP) affect exchange rates.
  3. Explain the balance of payment (BOP) summary accounts and the process through which surpluses and deficits are tracked through their use.
  4. Provide an example by creating a balance of payment summary account sample, including a surplus or deficit.

Write a 2–3-page paper in Word format. Utilize at least three scholarly sources in your research. Make sure you write in a clear, concise, and organized manner; demonstrate ethical scholarship in accurate representation and attribution of sources; display accurate spelling, grammar, and punctuation. Use the APA format.

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