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Arnold Economics 31
Economics by Arnold Chapter 31
| Question | Answer |
|---|---|
| ____ is the periodic summary of all of the international transactions of a country. | Balance of Payments |
| ____ is the market where foreign monies are exchanged. | Foreign Exchange Market |
| ____ is a category of the Balance of Payments that records the transactions of goods and services. | Current Account |
| Value of Exports - Value of Imports | Merchandise Trade Balance |
| Value of Exports > Value of Imports | Merchandise Trade Surplus |
| Value of Exports < Value of Imports | Merchandise Trade Deficit |
| ____ is a one-way money transfer. | Unilateral Transfer |
| ____ is a category of the Balance of Payments that records the buying and selling of assets and lending and borrowing activities. | Capital Account |
| System in which the exchange rate is determined by supply and demand. | Flexible (Floating) Exchange Rate System |
| An ____ in the exchange rate means that the value of the currency has increased relative to other currencies. | Appreciation |
| A ____ in the exchange rate means that the value of the currency has decreased relative to other currencies. | Depreciation |
| If the US growth in income is greater than Britian's growth in income then the US Dollar will ____ relative to the British pound | depreciate |
| If the US experiences higher inflation than Britian then the US Dollar will ____ relative to the British Pound. | depreciate |
| If the real interest in the US is greater than in Britian then the US Dollar will ____ relative to the British Pound. | appreciate |
| System in which central bank intervene in the foreign exchange market so as to keep the exchange rate constant. | Fixed Exchange Rate System |