Using the simple model of Table 15.12, explain why there is a balance of payments equilibrium when export spending equals import spending. What is the more general condition for equilibrium in the balance of payments? 

TABLE 15.2 (updated) Effect of Dollar Appreciation and Depreciation on U.S. Exports and Imports R=EURO/S DOMESTIC PRICE JAN 09: R=0.76 JUNE 09: R=0.71 EFFECT ON EXPORTS (X) AND IMPORTS (M) $1,000 U.S. exports: Televisions U.S. imports: European cars Euro 25,000 JAN 08: R = 0.68 JAN 09: R 0.76 $1,000 U.S. exports: Televisions U.S. imports: European cars Euro 25,000