Explain the balance of payments, including the types of international transactions that make up the balance of payments, and provide one example for each type of transaction. If a state faces a balance of payments problem, from what international organization could it seek help? Explain your reasoning.
What will be an ideal response?
The ideal answer should include:
1. Explain a state's balance of payments.
2. Describe the types of international transactions that make up the balance of payments, including the current account, flows of capital, and changes in reserves.
3. Provide one example for each of the three types. For example, the current account is exemplified by money flowing into a state to pay for exports and money flowing out of a state to pay for imports.
4. Identify the IMF as the primary international organization offering aid to states experiencing balance of payments problems.
5. Offer a concise summary and effective conclusion.
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