Santa’s Systems
In this system, Santa’s currency value is determined strictly by the market forces of demand and supply, without any central bank intervention.
floating exchange rate
This account records the trade of actual physical toys (goods) and elf-led tours of the workshop (services).
Current account
If everyone in the world suddenly wants a "Snoop on the Stoop" doll, the demand for the currency used to buy it will do this.
increase, causing the currency to appreciate
A weaker (depreciated) currency makes North Pole toys cheaper for the world, causing this metric (Exports - Imports) to increase.
Net Exports
What did the other reindeer not let Rudolph do because of his shiny red nose?
Join in any reindeer games
When the Central Bank of Bopland sets the value of the "bople" at a specific level and must constantly intervene to keep it there.
fixed exchange rate
These represent inflows of money into the workshop (like selling a sleigh) and are recorded with a "+" sign.
credits
When an elf sends part of his North Pole paycheck back home to his family in a different country, it is called this.
remittance
This often falls when a currency depreciates because the price of imported essentials like gasoline and oil increases.
living standards
Which popular beverage is also called “milk punch?”
egg nog
This "middle ground" system allows the market to set values, but the central bank periodically steps in to stabilize large fluctuations.
managed float or managed exchange rate
If a group of gingerbread men builds a permanent cookie factory in the North Pole, it is recorded in this account.
financial account
If the North Pole Dollar loses value (depreciates), the cost of imported materials for toys goes up, causing this type of inflation.
cost push inflation
If the North Pole owes $1,000 to the South Pole and its currency depreciates, the actual value of its debt will do this.
increases
Elvis isn’t going to have a white Christmas, he’s going to have a….
Blue christmas
If Santa keeps the North Pole Dollar artificially low to help his export producers, his currency is referred to by this "unclean" name.
dirty float
This specific section of the Balance of Payments is used to ensure that total debits always equal total credits in the real world.
errors and omissions
To increase the value of their currency, a central bank can sell these to buy back their own domestic currency.
foreign currency reserves
A strong (appreciated) currency can lead to a "recessionary gap," which specifically increases this type of unemployment.
cyclical unemployment
In the classic Christmas movie, How The Grinch Stole Christmas, the Grinch was described with three words. What are they?
Stink,stank,stunk
If the North Pole officially lowers the fixed value of its currency to make its toys cheaper for the world, the action is called this
devaluation
This relatively small account includes debt forgiveness for naughty list members and the purchase of natural resources like "Magic Snow."
capital account
If Santa’s bank increases these, it will attract foreign investors seeking higher returns, thereby increasing currency demand.
interest rates
Growth of industries caused by a depreciation can lead to increased investment spending, resulting in this type of long-term economic benefit.
long term growth
In the movie, It’s A Wonderful Life, what happened every time a bell rang?
An angel got his wings