open economy

Card Set Information

Author:
Anonymous
ID:
3048
Filename:
open economy
Updated:
2009-12-14 00:42:42
Tags:
macro
Folders:

Description:
export import
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  1. net exports
    value of a nations exports minus the value of its imports
  2. net capital outflow
    the purchase of foreign assets by domestic residents minus the purchase of domestic assets by foreigners
  3. trade surplus
    an excess of exports over imports
  4. trade deficit
    an excess of imports over exports
  5. nominal exchange rate
    the rate at which a person can exchange the currency of one country for the currency of another
  6. real exchange rate
    the rate at which a person can trade goods and services of one country for the goods and services of another
  7. appreciation/ depreciation
    • appreciation-increase in the value of a currencyas measured by the amount of foreign currency it can buy
    • depreciation-decrease in the value of a currencyas measured by the amount of foreign currency it can buy
  8. purchasing power parity
    the theory of exchange rates whereby a unit of any given currency should be able to buy the same quantity of goods in all countries
  9. arbitrage
    taking advantage of price differences for same items in different markets
  10. real exchange rate
    • nominal exchange rate*domestic price
    • foreign exchange rate

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