Chapter 13 Flashcards
1
Q
Market for loanable funds (what is it?)
A
Interaction between savers supplying funds and borrowers demanding funds
2
Q
Market for loanable funds (equation)
A
S = I + NCO
3
Q
Market for foreign currency exchange (what is it?)
A
exists because people want to trade goods, services, and financial assets with people in other countries, but want to be paid in their own currency
4
Q
Market for foreign currency exchange (equation)
A
Same as the other ? (S - I = NCO)
5
Q
capital flight
A
large and sudden reduction in demand for assets located in country
6
Q
risk premium
A
The additional return investors require for taking on higher levels of risk in their investment
