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 is accomplished through both internal and external market adjustments. Internal market adjustments include changes in price levels, demand, and supply within a country, while external market adjustments involve changes in exchange rates and trade flows between different countries. These adjustments help to restore equilibrium in the balance of payments without the need for governmental control or tariff barriers.

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