Balance of Payments
In NCERT Introductory Macroeconomics, Chapter 5, this topic presents the balance of payments as a systematic record of a country's transactions with the rest of the world. You study the current account of exports, imports, services, and transfers, and the capital account of borrowings, investments, and reserve changes. The chapter then turns to the foreign exchange market, showing how demand and supply determine the exchange rate, and compares fixed, flexible, and managed floating systems, including the meaning of devaluation, depreciation, and a surplus or deficit.
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