This records receipts of payments from foreigners and to foreigners for goods and services.
What is the current account?
100
This is the basis of trade.
What is a comparative advantage?
100
When the US places an import quota on sugar, this happens to the price of sugar.
What is an increase in the price of sugar?
100
An economy in which goods and services are traded with other countries.
What is an open economy?
200
A limit on the quantity of a good produced abroad that can be sold domestically.
What is a quota?
200
This records foreign investment in the US minus US investment abroad.
What is the financial (capital) account?
200
The price of a country's currency in term of another currency.
What is the exchange rate?
200
You visit Italy this summer and buy your favorite econ teacher some antique linens, this would ___ the current account because it is an ____ of US dollars.
What is "decrease" and "outflow?"
200
When a country has a current account deficit, then there will be a ____ in its financial (capital) account.
What is a surplus in the financial account?
300
It is exports minus imports.
What is net exports?
300
The sum of the current account and the financial account.
What is zero?
300
The market in which foreign currencies are traded.
What is the FOREX market?
300
A foreigner buys a trading pin at Disney World. This would ____ the current account because it is an ____ of US dollars.
What is "increase" and "inflow?"
300
This is the nominal exchange rate for a fixed market basket of goods that will cost the same each country.
What is purchasing power parity?
400
A rate of exchange that is determined by supply and demand for a nation's currency.
What is a flexible or floating exchange rate?
400
This is when a nation's imports exceed its exports.
What is a trade deficit?
400
When one currency increases in value relative to another, it is said to have ___.