Studied by 3 people
Intervention
involves coordinated buying and selling of currencies in order to adjust their equilibrium values determined by supply and demand.
Life quota
tariffs raise the domestic price of goods and lowers the amount bought and sold.
Comparative advantage
suggests that free trade allows nations to consume more goods and services than if trade was restricted.
Depreciation
The decrease of the value of a currency in terms of another currency.
exchange rates
The ________ are impacted by the relative level of income and the relative level of prices in a nation.
Appreciation
The increase of the value of a currency in terms of another country.
Trade restrictions
are bad for consumers since they raise prices and limit their choices
Monetary and fiscal policy
can be used to fight inflation or recession
supply curve
for dollars reflects how many dollars are available in exchange for euros, it is upward sloping.
Official reserves
governments holdings of foreign currencies.
Net Exports
when a nations balance of trade is equal to its exports minus imports.
stimulatory effect
will be spent overseas, and exports will fall because of the inflation resulting from the increase in the money supply.
Net transfers
Money our government and citizens send as gifts or aid to foreigners mius how much foreigners send to us in gifts and aid.
Net Investment income
amount US citizen earns as interest and dividends from abroad minus how much was paid to foreigners in interest and dividends.
import quota
is a limit on the amount of a product that can be imported.
Managed float
Managed float: the current system for determining international exchange rates
Arcane rules and regulations
are often developed with no other purpose in mind than to discourage competition.
Gold standard
kept exchange rates between countries fixed, a unit of currency that is equivalent to a stated amount of gold.
Balance of Payments
Current account + capital account + financial account.
expansionary monetary policy
stimulates the economy in the short run by increasing the quantity of output and putting upward pressure on prices.
Monetary and fiscal policy
are less than effective when the economy is more open as opposed to closed to foreign trade.
Exchange rates
The value of one countrys currency in terms of anothers.
Net Exports
when a nations balance of trade is equal to its exports minus imports
Trade deficit
When the balance of trade is negative
Trade Surplus
Excess of a nations exports over its imports
Infant Industry
Industries that are just getting started (baby steps)
Dumping
The practice of foreign products selling in the domestic market for less than it cost to produce it
An import quota
is a limit on the amount of a product that can be imported
Balance of payments
an accounting of the funds that flow into and out of a country comprised of a capital account, the current account, and the financial account
Trade restrictions
Quotas, Tariffs, and Licensing requirements
Balance of Payments
Current account + capital account + financial account
Exchange rates
The value of one countrys currency in terms of anothers
Appreciation
The increase of the value of a currency in terms of another country
Depreciation
the decrease of the value of a currency in terms of another currency
Net Investment income
amount US citizen earns as interest and dividends from abroad minus how much was paid to foreigners in interest and dividends
Net transfers
Money our government and citizens send as gifts or aid to foreigners mius how much foreigners send to us in gifts and aid
Official reserves
governments holdings of foreign currencies
Gold standard
kept exchange rates between countries fixed, a unit of currency that is equivalent to a stated amount of gold
Managed float
the current system for determining international exchange rates
Monetary and fiscal policy
can be used to fight inflation or recession
Note 
Flashcard (50)