Term
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Definition
| Measurement of all international economic transactions between residents of a country and foreign residents. |
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Term
| What is the daily volume of foreign exchange? |
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Definition
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Term
| What are the current exchange rates for USD/Euro and Yen/USD? |
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Definition
USD/Euro = $1.35
Yen/USD = 90.37 |
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Term
| Credits in Balance of Payments |
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Definition
| Increase purchasing ability - Exports |
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Term
| Debits in Balance of Payments |
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Definition
| Decreases purchasing ability - Imports |
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Term
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Definition
| Where something is given without anything in return. Ex - When migrants and permancent workers abroad send home gifts and other sums of money or items. |
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Term
| What 4 factors make up the Current Account |
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Definition
- Net export/import of goods (balance of trade)
- Net ex/imp of services
- Net Income- Income from foreign investments
- Net transfers - Migrants send money home
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Term
| What 2 transactions dominate the balance of payments? |
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Definition
- Exchange of real assets (exchange of goods or services for other goods and services or for money)
- Exchange of Financial Assets (Exchange of financial claims like stocks, bonds, loans for other financial claims or money.
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Term
| What are the 5 sections of the balance of payments? |
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Definition
- Current Account
- Capital Account
- Financial Account
- Net Errors and Omissions
- Reserves and Related Items
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Term
| 3 components of the financial account in the balance of payments |
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Definition
- Direct Investments
- Portfolio investments
- Other investments
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Term
| Macroeconomic variables that affect GDP |
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Definition
- GDP
- The exchange rate
- Interest Rates
- Inflation Rates
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Term
| 3 reasons we have a deficit in the BOP |
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Definition
- We are lazy and don't like to work so we import rather than export.
- We never save enough to invest domestically
- We attract foreign investments. Foreign countries want dollars so they sell to the U.S.
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