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Capital Flows and Balance of Payments
Exchange Rates
Exam 1 Review
Exam 1 Review
Part Deux
Exam 2 Review
100
A summary of the country’s transactions with other countries
What is balance of payments accounts?
100
The prices at which currencies trade
What are exchanges rates?
100
What we use to determine who has the comparative advantage
What is opportunity cost?
100
Objective statements that we can test in order to prove or disprove
What is a positive statement?
100
The entity that carries out monetary policy
What is the Federal Reserve?
200
A country's balance of payments on goods and services plus net international transfer payments and factor income
What is a current account?
200
Where currencies are traded
What is the foreign exchange market?
200
A good that experiences an increases in demand when another good increases in price
What is a substitute good?
200
The level of production of a point outside the Production Possibility Frontier for a closed economy
What is infeasible?
200
The US government is at risk of bankruptcy and the US government should operate like a household and not incur large debt
What are US debt myths?
300
The difference between a country's sales of assets to foreigners and its purchases of assets from foreigners for a given period.
What are financial accounts?
300
When a currency becomes more valuable
What is appreciation?
300
A curve with a positive slope representing producers in a market
What is the supply curve?
300
Peanut Butter and Jelly, Tennis Balls and Tennis Racquets, Cars and Gasoline, Rum and Coke, Chips and Guac, etc.
What are complements?
300
A graph that shows the relationship between unemployment and inflation
What is the Phillip's curve?
400
What trade responds to changes in
What is the real exchange rate?
400
The exchange rate that counts in decisions about buying and selling abroad.
What is the real exchange rate?
400
The area defined by the difference between the demand curve and the price in the market
What is consumer surplus?
400
C + I + G + NX
What is the GDP equation?
400
The percentage of deposits that banks have to keep in their vaults or at the Federal Reserve
What is the reserve ratio?
500
BACKWARDS JEOPARDY: The merchandise trade balance has to do with exports and imports. However, it includes goods and not ______?
Services
500
The exchange rate under which we cannot use monetary policy
What is fixed exchange rate?
500
The number of employed + unemployed people in an economy
What is the labor force?
500
A market inefficiency that occurs the price in the market is below the equilibrium point
What is a shortage?
500
The change in consumer spending divided by the change in aggregate disposable income
What is Marginal Propensity to Consume?