Lesson 66 Flashcards
1
Q
What do increase exports do for the price of your currency?
A
Increase it
As more people are trading with it
Called a trade surplus
Opposite is called a trade defecit
2
Q
Balance of payments equation (not the balance of payments that add to 0)
A
exports - imports
3
Q
Trade surplus cycle
A
Trade surplus
Increased demand for currency
Increased value of the currency
Increased price of exports
Decreased surplus
4
Q
Is the trade surplus cycle positive or negative?
A
negative
5
Q
Trade deficit cycle (NOT JUST THE INVERSE OF TRADE SURPLUS)
A
Trade deficit
Decrease demand for currency
Decrease value of currency
Decrease price of exports
Increased price of imports
Decreased deficit
