Question

Explain the Significance of the Balance of Payments to International Business Decision.

Answer 1

Yes the balance of payments has a great significance to international business decision because with the help of balance of payments it can be easily known that whether the country's imports are larger than exports or exports are larger than imports.Balance of payments is called to be in deficit when the imorts are more than exports and the balance of payments is called in surplus when the exports are more than imports.Thus balance of payments helps in knowing the financial condition of a country and helps in knowing about the funds available with the country.Also the government of the country makes various policies by checking out the balance of payments of a country.This with the help of this,it becomes very easy to make decisions at international level business because no country wants that their imports should be more than exports.