Studied by 202 people
Tariffs
________ collect revenue for the government, while quotas do not.
Speculators
________ are betting on the dollar to rise in value.
Official reserves
________ account- The Feds adjustment of a deficit or surplus in the current and capital account by the addition or subtraction of foreign currencies so that the balance of payments is zero.
Capital
________ (or financial) account- This account shows the flow of investment on real or financial assets between a nation and foreigners.
Speculation
________- Foreign currencies can be traded as assets causing investors to seek to profit from buying currency at a low rate and selling it at a higher rate.
aggregate demand
When investment spending increases, ________ increases which raises the price level.
Exchange rate
________- The price of one currency in terms of a second currency.
central bank
If the ________ of a country is practicing a contractionary monetary policy (increasing the reserve ratio, increasing the discount rate, or selling bonds), it will affect the value of the exchange rate.
Revenue tariff
________- An excise tax levied on goods not produced in the domestic market.
FOREX Market
There are four determinants that can change either the supply or demand in the ________.
deficit balance
A(n) ________ tells us that the United States sent more American dollars abroad than foreign currency received in current transactions.
Determinants of exchange rates
________- External factors that increase the price of one currency relative to another.
Balance of payment
________ surplus- When more foreign currency was coming into the US than American dollars sent abroad.
government practices
When the ________ an expansionary fiscal policy (increase in spending or decrease in taxes), there is an effect on the exchange rate for that country's currency.
Relative incomes
________- When a nations macroeconomy is strong and incomes are rising, they increase their demand for all goods, including those produced abroad.
real interest rates
When ________ are high, it generates inbound capital flow.
injection of funds
It is the ________ into a domestic economy that occurs through the purchase of domestic assets by foreign investors.
extraction of funds
It is the ________ from a domestic economy that occurs through the purchase of foreign assets by domestic investors.
Consumer tastes
________- When domestic consumers build a stronger preference for foreign- produced goods and services, the demand for those currencies increases and the dollar depreciates.
aggregate demand
When investment spending decreases, ________ decreases which lower the price level.
exchange rate
As the ________ rises, domestic and foreign consumers will purchase less quantity of the currency.
FOREX Market
It is achieved in the ________ (the market in which foreign currency is bought and sold) when the quantity supplied of the currency equals the quantity demanded of the currency at a specific exchange rate.
revenue tariff
If a(n) ________ were levied on bananas, it would not be a serious impediment to trade, and it would raise a little revenue for the government.
government practices
When the ________ a contractionary fiscal policy (decreases spending or increases taxes), there is an effect on the exchange rate of that country's currency.
Current account
This account shows current import and export payments of both goods and services and investment income sent to foreign investors of the United States and investment income received by U.S. citizens who invest abroad
Capital (or financial) account
This account shows the flow of investment on real or financial assets between a nation and foreigners
Official reserves account
The Feds adjustment of a deficit or surplus in the current and capital account by the addition or subtraction of foreign currencies so that the balance of payments is zero
Balance of payments deficit
When the US has sent more dollars out than foreign currency has come in while adding the current and capital account
Balance of payment surplus
When more foreign currency was coming into the US than American dollars sent abroad
Exchange rate
The price of one currency in terms of a second currency
Determinants of exchange rates
External factors that increase the price of one currency relative to another
Consumer tastes
When domestic consumers build a stronger preference for foreign-produced goods and services, the demand for those currencies increases and the dollar depreciates
Relative incomes
When a nations macroeconomy is strong and incomes are rising, they increase their demand for all goods, including those produced abroad
Speculation
Foreign currencies can be traded as assets causing investors to seek to profit from buying currency at a low rate and selling it at a higher rate
Revenue tariff
An excise tax levied on goods not produced in the domestic market
Protective tariff
An excise tax levied on a good that is produced in the domestic market so that it may be protected from foreign competition
Import quota
A limitation on the amount of a good that can be imported into the domestic market
Appreciating or stronger currency
When the value of a currency is rising relative to another currency
Depreciating or weaker currency
When the value of a currency is falling relative to another currency
Note 
Flashcard (85)