Problem
1. Can a nation have a surplus in its balance of trade and a deficit in its balance of payments? Explain.
2. "A nation's balance of payments must always be in balance." In what sense is this true? What is a "balance-of-payments deficit?" Under a flexible exchange system, will a balance-of payments deficit automatically be corrected? Explain.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.