If a country has a surplus in its balance of payments, all else being equal, what is likely to happen to its money supply? A B C D
1 )
It will fall, because more of its goods were purchased by foreign consumers than by consumers at home.
2 )
It will remain unchanged, because its exports are bought with foreign currency.
3 )
It will remain unchanged, because the surplus is automatically offset by a loan for the deficit countries.
It will rise, because the foreign currency received for exports will be exchanged for domestic currency.
