Help with Macroeconomics Question

[JoshB645]

I having trouble with this question, and I can't find it in my book.
Briefly explain the relationship between currency exchange, balance of payments, reserve accounts and trade deficits or surpluses? Any help would be very useful.

 

[crgarcia]

Quote from JoshB645:

I having trouble with this question, and I can't find it in my book.
Briefly explain the relationship between currency exchange, balance of payments, reserve accounts and trade deficits or surpluses? Any help would be very useful.

Generally a country with strong exports, positive balance, modest deficits, low debt; will have a strong currency.

This, until the strong currency makes exports too expensive for foreign customers. When exports drop, so does the currency.