Chapter 17 Vocabulary

Chapter 17 Vocabulary - portfolio investment 8. Capital...

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Chapter 17: Macroeconomics in an Open Economy 1. Open economy: An economy that has interactions in trade or finance with other countries 2. Closed economy: An economy that has no interactions in trade or finance with other countries 3. Balance of payments: The record of a country’s trade with other countries in goods, services or assets 4. Current account: The part of the balance of payments that records a country’s net export, net income on investment and net transfers 5. Balance of trade: The difference between the value of the goods a country exports and the value of the goods a country imports 6. Financial account: The part of the balance of payments that records purchases of assets a country has made abroad and foreign purchases of assets in the country 7. Net foreign investment: The difference between capital outflows from a country and capital inflows, also equal to net foreign direct investment plus net foreign
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Unformatted text preview: portfolio investment 8. Capital account: The part of the balance of payments that records relatively minor transactions, such as migrants transfer and sales and purchases of nonproduced, nonfinancial assets 9. Nominal exchange rate: The value of one countrys currency in terms of another countrys currency 10. Currency appreciation: An increase in the market value of one currency relative to another currency 11. Currency depreciation: A decrease in the market value of one currency relative to another currency 12. Speculators: Currency traders who buy and sell foreign exchange in an attempt to profit from changes in exchange rates 13. Real exchange rate: The price of domestic goods in terms of foreign goods 14. Saving and investment equation: An equation that shows that national saving is equal to domestic investment plus net foreign investment...
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This note was uploaded on 06/08/2011 for the course ECON 1 taught by Professor Bergstrom during the Spring '07 term at UCSB.

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