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International transactions
________ necessitate the existence of a market- the foreign exchange market- where currencies can be swapped for one another.
power parities
Purchasing ________ are commonly calculated by estimating the cost of purchasing broad market baskets comprising a variety of products and services, such as autos and food, as well as housing and telephone calls.
Exchange rates
________, or the prices at which currencies trade, are determined by this market.
Debtors
Countries that owe money to the rest of the world
Creditors
Countries that owe money to the rest of the world) (countries to which the rest of the world owes money
equilibrium exchange rate
The term, ________, refers to the exchange rate at which the quantity of U.S. dollars demanded in the foreign exchange market is equal to the quantity of U.S. dollars supplied.
Note
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