International Macroeconomics

These flashcards cover key concepts and terms from the chapter on International Macroeconomics, focusing on topics like balance of payments, exchange rates, and their implications in economic contexts.

Balance of Payments Accounts

A summary of a country's transactions with other countries for a given year.

Current Account

The balance of payments on goods and services plus net international transfer payments and factor income.

Financial Account

The difference between sales of assets to foreigners and purchases of assets from foreigners.

Currency Appreciation

The increasing value of one currency in terms of other currencies.

Currency Depreciation

The loss of value of one currency in terms of other currencies.

Fixed Exchange Rate

An exchange rate that is held at or near a particular target against another currency.

Floating Exchange Rate

An exchange rate that is allowed to fluctuate in the market.

Devaluation

A reduction in the value of a currency that is set under a fixed exchange rate regime.

Revaluation

An increase in the value of a currency that is set under a fixed exchange rate regime.

Purchasing Power Parity

The nominal exchange rate at which a basket of goods would cost the same in two countries.

Real Exchange Rate

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

Aggregate Demand (AD)

The total demand for goods and services within an economy at a given overall price level.

Interest Rate

The amount charged by lenders to borrowers for the use of money, typically expressed as a percentage.