GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Credit (+) items in the balance of payments correspond to anything that
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involves payments to foreigners
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involves receipts from foreigners
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increases the domestic money supply
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decreases the demand for foreign exchange
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Explanation:
Detailed explanation-1: -The demand for foreign exchange corresponds to the debit items on a nation’s balance-of-payments statement; the supply of foreign exchange corresponds to the credit items.
Detailed explanation-2: -The market balance of payments refers to the balance of supply and demand for a country’s currency in the foreign-exchange market at a given rate of exchange. If the exchange rate is fixed, the market balance of payments would be in balance only by chance.
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