Terms : Hide Images
| 13484384198 | Net Exports | (Xn) = Exports - Imports | 0 | |
| 13484384199 | Trade Surplus | Exporting more than is imported | 1 | |
| 13484384200 | Trade Deficit | AKA Trade Gap Exporting less than is imported | 2 | |
| 13484384201 | Balance of Payments | Summary of a country's international trade -Within a given year -In own currency | 3 | |
| 13484384202 | Foreign Direct Investment | When a foreign company buys a business in a different country | 4 | |
| 13484384203 | Net Capital Outflow | The difference between purchase of foreign assets and domestic assets by foreigners | 5 | |
| 13484384204 | What two accounts is the balance of payments made up of? | Current account Financial account | 6 | |
| 13484384205 | What is the current account made up of? | 1. Trade in goods and services (Net Exports): Difference between a nation's exports and imports 2. Investment Income: Income earned from investments abroad minus foreign earnings from investments in the US (interest) 3. Net Transfers: Funds sent by residents of one country to another country | 7 | |
| 13484384206 | Current Account (CA) Trade in Goods and Services | Exports of goods and services + (plus/credit) Imports of goods and services - (minus/debit) | 8 | |
| 13484384207 | Financial Account (Capital) | Measures the purchase and sale of financial assets abroad (purchases of things that continue to earn money) | 9 | |
| 13484384208 | Financial Account (FA) Summarizes Trade in Assets | US assets owned by foreigners + (plus/credit) Foreign assets owned by US - (minus/debit) | 10 | |
| 13484384209 | Financial Account Surplus | Inflow > outflow | 11 | |
| 13484384210 | Financial Account Deficit | Inflow < outflow | 12 | |
| 13484384211 | What must a country have if the have a deficit in the current account? | A surplus in the financial account | 13 | |
| 13484384212 | US income increases relative to other countries. Does the balance of payments move toward a deficit or surplus? | 1. U.S. Citizens have more disposable income 2. Americans import more 3. Net exports decrease 4. The current account balance decreases and moves toward a deficit | 14 | |
| 13484384213 | If the US dollar depreciates relative to other countries does the balance of payments move toward a deficit or a surplus? | 1. US exports become more desirable 2. America exports more 3. Net exports increases 4. The current account balance increases and moves toward a surplus | 15 | |
| 13484384214 | What do we look at in the FOREX market? | Two countries/currencies at a time We examine the price of one currency in terms of the other currency | 16 | |
| 13484384215 | What does the exchange rate depend on? | Which currency you're converting | 17 | |
| 13484384216 | What happens if you need more dollars to buy one euro (the price for a euro increases)? | The U.S. Dollar depreciates relative to the Euro | 18 | |
| 13484384217 | Depreciation | The loss of a country's currency with respect to a foreign country More units of dollars are needed to buy a single unit of the other currency The dollar is said to be "weaker" | 19 | |
| 13484384218 | What happens if you need less dollars to buy one Euro (the price for a Euro decreases)? | The US Dollar appreciates relative to the Euro | 20 | |
| 13484384219 | Appreciation | The increase in value of a country's currency with respect to a foreign currency Less units of dollars are needed to buy a single unit of the other currency The dollar is said to be "stronger" | 21 | |
| 13484384220 | What happens if you demand one currency? | You must supply your currency | 22 | |
| 13484384221 | Dollar Market Graph | The bottom currency on the vertical axis is also the bottom of the horizontal axis |  | 23 |
| 13484384222 | FOREX Shifters | 1. Changes in Tastes 2. Changes in Relative Incomes 3. Changes in Relative Price Level 4. Changes in Relative Interest Rate | 24 | |
| 13484384223 | Changes in Tastes (FOREX Shifter) | Ex. British tourists flock to the US Demand for US dollars increases (shifts right) Supply of British Pounds increases (shifts right) Pound: Depreciates Dollar: Appreciates | 25 | |
| 13484384224 | Changes in Relative Incomes (FOREX Shifter) | Resulting in more imports Ex. US growth increases US incomes US buys more imports US demand for Pounds increases Supply of US Dollars increases Pound: Appreciates Dollar: Depreciates | 26 | |
| 13484384225 | Changes in Relative Price Level (FOREX Shifter) | Resulting in more imports Ex. US prices increase relative to Britain US demand for cheaper imports increases US demand for pounds increases Supply of US Dollars increases Pound: Appreciates Dollar: Depreciates | 27 | |
| 13484384226 | Changes in Relative Interest Rate | Ex. US ha a higher interest rate than Britain British people want to put money in US banks Capital flow increases towards the US British demand for US Dollars increases British supply more Pounds Pound: Depreciates Dollar: Appreciates | 28 | |
| 13484384228 | Fixed Exchange Rate | The government activity manages the country's currency | 29 | |
| 13484384229 | Floating Exchange Rate | The market determines the value of the country's currency | 30 |
