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Appreciation
________- An increase in the value of a currency as measured by the amount of foreign currency it can buy.
Depreciation
________- a decrease in the value of a currency as measured by the amount of foreign currency it can buy.
nominal exchange rate
The ________ between the currencies of two countries must reflect the price levels in those countries.
government policies
The ________ that affect foreign ownership of domestic assets.
Net capital outflow
________- the purchase of foreign assets by domestic residents minus the purchase of domestic assets by foreigners.
domestic investment
When a nations saving exceeds its ________, its net capital outflow is position, indicating that the nation is using some of its savings to buy assets abroad.
Trade
________ surplus- the excess of exports over imports**
Trade balance
________- the value of a nations exports minus the value of its imports; also called net exports.
Nominal exchange rate
________: the rate at which a person can trade the currency of one country for the currency of another.
Note 
Flashcard (40)