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What is Equilibrium and Disequilibrium in BOP about?

Equilibrium exists when the demand and supply of a foreign currency are equal in a given time period, while disequilibrium refers to a deficit or surplus. A surplus occurs when total receipts exceed total payments, and a deficit is when total payments exceed total receipts. Equilibrium allows an open economy to function without severe unemployment on a continuing basis over a relevant time period, generally one year. Disequilibrium may arise for short or long periods, but a continued disequilibrium indicate

Author

Sagar

Language

EN