Help with Macroeconomics Question

Discussion in 'Economics' started by JoshB645, Apr 23, 2008.

  1. JoshB645


    I having trouble with this question, and I can't find it in my book.
    Briefly explain the relationship between currency exchange, balance of payments, reserve accounts and trade deficits or surpluses? Any help would be very useful.
  2. Generally a country with strong exports, positive balance, modest deficits, low debt; will have a strong currency.

    This, until the strong currency makes exports too expensive for foreign customers. When exports drop, so does the currency.