ch. 31 AP Macro Flashcards

9680892796	closed economy	an economy that has no interactions in trade or finance with other countries; C + I + G=Y	0
9680901300	open economy	an economy that trades goods and services with other countries; Y=C + G+ I + NX	1
9680906511	exports	goods produced domestically and sold abroad	2
9680908433	imports	goods produced abroad and sold domestically	3
9680910909	net exports	exports - imports	4
9680914609	trade balance	the value of a nation's exports minus the value of its imports; also called net exports	5
9680917911	trade surplus	the amount by which the value of a country's exports exceeds the cost of its imports.	6
9680926573	trade deficit	An imbalance in international trade in which the value of imports exceeds the value of exports.	7
9680933048	balanced trade	a situation in which exports equal imports	8
9680935784	net capital outflow (NCO)	domestic residents' purchases of foreign assets minus foreigners' purchases of domestic assets	9
9680941826	nominal exchange rate	the rate at which a person can trade the currency of one country for the currency of another	10
9680945752	appreciation	an increase in the value of a currency as measured by the amount of foreign currency it can buy	11
9680948470	depreciation	a decrease in the value of a currency as measured by the amount of foreign currency it can buy	12
9680951424	real exchange rate	the rate at which the goods and services of one country trade for the goods and services of another	13
9680955322	purchasing power parity	"law of one price"; unit of currency in one country should buy the same goods and services in the currency of another country	14