Knowing the ways to determine the rate of exchange is insufficient as the skills to weigh the effects of this is still lacking. International payments and trades are highly susceptible to currency depreciation or appreciation, knowing how this happens is important. In order to understand these concepts better the cement needs to be laid for study of the scale of international trading, borrowing and lending. Keeping a record of these different forms of transactions are crucial and they are encapsulated under the topic of balance of payments accounts.


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