Question: 1. In the United States and most develop countries with floating exchange rates, the current account and the combined financial/capital accounts tend to be inversely

1. In the United States and most develop countries with floating exchange rates, the current account and the combined financial/capital accounts tend to be inversely related in that when one is positive, the other tends to be negative.

True or False

2. The effect of an imbalance in the BOP is the same for countries on a fixed exchange rate regime as for those on a floating exchange rate regime.

True of Flase

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