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Flashcards in Unit 5 Deck (15)
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1

Trade deficit

Importing more than exporting

2

Trade surplus

Exporting more than importing

3

Appreciation

When the money is worth more

4

Depreciation

When the money is worth less

5

Current account

Goods and services. Trade, net income, net transfers

6

Financial account

Balance of assets

7

Forex market

Y axis (currency compared over currency)
X axis (q of current currency)
Supply and demand, (standard)

8

Shifters of forex

Interest rates
Tastes
Income
Inflation

9

Interest rate

High interest is shifts demand to the right
Low intersst shifts demand to the left

10

Tastes

Increase in tastes increases demeaned
Visa versa

11

Income

Up in income = up in supply

12

Price level

High inflation equals low demand

13

Going up on the forex y axis

Appreciation

14

Going down on forex y axis

Depreciation

15

The balance of payments between two countries

Must be equal to zero ex. If China spends 300 dollars to America. Of 1000 then America must have 300 more