The BOP is a useful tool for detecting signs of trouble that could lead to governmental trade restrictions.

Question

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The Balance of Payments (BOP) is a comprehensive record of a country's financial transactions with the rest of the world, including imports, exports, and financial flows. Large imbalances in the BOP can indicate economic issues that might prompt a government to implement trade restrictions or adjustments to stabilize the economy.

The BOP Is a Useful Tool for Detecting Signs of Trouble