The following table shows the 2008 balance of payments statement for Transylvania.All figures are in billions of dollars.

-Refer to the above data.If Transylvania was on a system of flexible exchange rates,its balance of payments position would cause the international value of its currency to depreciate.

Question

The following table shows the 2008 balance of payments statement for Transylvania.All figures are in billions of dollars.
 
-Refer to the above data.If Transylvania was on a system of flexible exchange rates,its balance of payments position would cause the international value of its currency to depreciate.

Quizplus · Accepted Answer

Transylvania has a current account deficit, meaning it is importing more than it is exporting. This would cause a decrease in demand for its currency on the international market, leading to a depreciation of its currency under a flexible exchange rate system.

The Following Table Shows the 2008 Balance of Payments Statement