The mechanisms (according to the theory of international trade and balance of payments) for producing self-correction in out-of-balance accounts is accomplished through:
A)internal market adjustments.
B)external market adjustments.
C)internal and external market adjustments.
D)governmental control.
E)governmental tariff and nontariff barriers.

Question

Quizplus · Accepted Answer

The theory of international trade and balance of payments suggests that self-correction in out-of-balance accounts can be achieved through both internal and external market adjustments. Internal adjustments might include changes in domestic prices and wages, while external adjustments could involve changes in exchange rates or international competitiveness.

The Mechanisms (According to the Theory of International Trade and Balance