Ap Econ terms ch.31 - minus the purchase of domestic assets...

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Chapter 31 Key Terms 1. Closed economy- an economy that does not interact with other economies in the world 2. Open economy - an economy that interacts freely with other economies around the world. 3. Exports - goods and services that are produced domestically and sold abroad. 4. Imports - goods and services that are produced abroad and sold domestically. 5. Net exports - the value of a nation's exports minus the value of its imports; also called the trade balance. 6. Trade balance - the value of the nation's exports minus the value of it's imports; also called the net exports. 7. Trade surplus - an excess of exports over imports. 8. Trade deficit - an excess of imports over exports. 9. Balanced trade - a situation in which exports equal imports. 10. Net capital outflow - the purchase of foreign assets by domestic residents
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Unformatted text preview: minus the purchase of domestic assets by foreigners. 11. Nominal exchange rate -the rate at which a person can trade the currency of one country for the currency of another. 12. Appreciation- an increase in the value of a currency as measured by the amount of foreign currency it can buy. 13. Depreciation -a decrease in the value of a currency as measured by the amount of foreign currency it can buy. 14. Real exchange rate -the rate at which a person can trade the goods and services of one country for the goods and services of another. 15. Purchasing -power parity - a theory of exchange rates whereby a unit of any given currency should be able to buy the same quantity of goods in all countries....
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This note was uploaded on 10/19/2010 for the course ECON 201 taught by Professor Coomber during the Spring '08 term at Community College of Baltimore County.

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