When a country is the most efficient producer of a product
What is absolute advantage
100
What are the labels to the foreign exchange graph
What is quantity of money on the x-axis and exchange rate on the y axis
200
What are net current transfers
Account transactions in which a resident in one nation provides a nonresident with economic value
200
When a foreign company buys business in a different country
What is Foreign Direct Investment
200
What is depreciation
A decrease in the value of a currency
200
Poland can make 8 pants or 16 socks. Iceland can make 20 pants or 30 socks. Who has a comparative advantage in producing socks?
What is Poland
200
Relative price of currencies
What is Exchange Rate
300
What is net foreign income
The difference between the aggregate amount that a country's citizens and companies earn abroad, and the aggregate amount that foreign citizens and overseas companies earn in that country.
300
Foreign assets minus domestic assets is...
What is Net Capital Outflow
300
What is the effect on net exports if currency appreciates?
Net exports decline
300
Tariff on a product not produced domestically
What is a revenue tariff?
300
What are the shifters of FOREX?
What is Change in tastes, changes in relative incomes, changes in relative price levels, changes in relative interest rates, and regulation
400
What is a debit
A loss in the current/financial account
400
True or false: If a country has a deficit in the current account then they MUST have a surplus in financial account
What is True
400
How will higher real interest rates affect the demand for a country's currency?
Demand will increase
400
Trade agreement between 23 nations that guaranteed equal, nondiscriminatory trade for all members, reduction of tariffs by negotiation, and the elimination of import quotas
What is General Agreement on Tariffs and Trade (GATT)
400
What would happen to the U.S dollar if Europeans prefer vacationing in the U.S? What would happen to the Euro
What is U.S dollar appreciates and demand increases and the Euro depreciates and supply decreases
500
Gloria sends $500 to her family in Colombia. How does this affect the US Current Account?
Current Account decreases by $500
500
John receives $1000 from a building he purchased in Saudi Arabia, how does this affect the U.S financial account
What is It doesnt
500
What will happen to the value of a currency if real interest rates rise?
Currency will appreciate
500
Writer of "The Wealth of Nations" and advocated for specialization.