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Appreciates —

When a currency increases in value relative to another currency.

Balance of payments —

A summary of all financial transactions between a country and the rest of the world, including the current account and financial account.

Current account —

The section of the balance of payments that records trade in goods and services, income from investments, and net transfers.

Depreciates —

When a currency decreases in value relative to another currency.

Devaluation —

A deliberate lowering of a currency's value by the government under a fixed exchange rate system.

Equilibrium exchange rate —

The exchange rate at which the quantity of a currency demanded equals the quantity supplied.

Exchange market intervention —

When a government or central bank buys or sells currency in the foreign exchange market to influence exchange rates.

Exchange rate regime —

The system a country uses to manage its currency's value, such as fixed, floating, or managed.

Exchange rates —

Prices at which one currency can be exchanged for another in the foreign exchange market.

Financial account —

The part of the balance of payments that records international flows of financial assets, such as stocks, bonds, and real estate.

Fixed exchange rate —

An exchange rate system where the government commits to maintaining its currency at a specific value.

Floating exchange rate —

An exchange rate system determined by supply and demand with no direct government intervention.

Foreign exchange controls —

Government restrictions on currency trading to influence exchange rates

Foreign exchange market —

The global market where currencies are traded and exchange rates are determined.

Foreign exchange reserves —

Assets held by a nation's central bank (often foreign currencies) used to stabilize the country's currency.

Import quota —

A limit on the quantity of a good that can be imported into a country.

Nontariff barrier —

Trade restrictions other than tariffs or quotas, such as regulations, product standards, or licensing rules.

Protectionism —

Policies that restrict imports to protect domestic industries, such as tariffs, quotas, or subsidies.

Purchasing power parity —

The idea that exchange rates adjust so identical goods cost the same in different countries.

Real exchange rate —

The exchange rate adjusted for differences in price levels between countries.

Revaluation —

A deliberate increase in a currency's value by the government under a fixed exchange rate system.

Tariffs —

Taxes on imported goods intended to raise revenue or protect domestic industries.

Trade balance —

The difference between a country's exports and imports of goods and services.

Trade deficit —

When a country imports more than it exports.

Trade surplus —

When a country exports more than it imports.

World Price —

The price of a good on the global market, determined by international supply and demand.

Appreciates

When a currency increases in value relative to another currency.

Balance of payments

A summary of all financial transactions between a country and the rest of the world, including the current account and financial account.

Current account

The section of the balance of payments that records trade in goods and services, income from investments, and net transfers.

Depreciates

When a currency decreases in value relative to another currency.

Devaluation

A deliberate lowering of a currency's value by the government under a fixed exchange rate system.

Equilibrium exchange rate

The exchange rate at which the quantity of a currency demanded equals the quantity supplied.

Exchange market intervention

When a government or central bank buys or sells currency in the foreign exchange market to influence exchange rates.

Exchange rate regime

The system a country uses to manage its currency's value, such as fixed, floating, or managed.

Exchange rates

Prices at which one currency can be exchanged for another in the foreign exchange market.

Financial account

The part of the balance of payments that records international flows of financial assets, such as stocks, bonds, and real estate.

Fixed exchange rate

An exchange rate system where the government commits to maintaining its currency at a specific value.

Floating exchange rate

An exchange rate system determined by supply and demand with no direct government intervention.

Foreign exchange controls

Government restrictions on currency trading to influence exchange rates.

Foreign exchange market

The global market where currencies are traded and exchange rates are determined.

Foreign exchange reserves

Assets held by a nation's central bank (often foreign currencies) used to stabilize the country's currency.

Import quota

A limit on the quantity of a good that can be imported into a country.

Nontariff barrier

Trade restrictions other than tariffs or quotas, such as regulations, product standards, or licensing rules.

Protectionism

Policies that restrict imports to protect domestic industries, such as tariffs, quotas, or subsidies.

Purchasing power parity

The idea that exchange rates adjust so identical goods cost the same in different countries.

Real exchange rate

The exchange rate adjusted for differences in price levels between countries.

Revaluation

A deliberate increase in a currency's value by the government under a fixed exchange rate system.

Tariffs

Taxes on imported goods intended to raise revenue or protect domestic industries.

Trade balance

The difference between a country's exports and imports of goods and services.

Trade deficit

When a country imports more than it exports.

Trade surplus

When a country exports more than it imports.

World Price

The price of a good on the global market, determined by international supply and demand.