Econ - international finance

A collection of national income accounts that summarize the flow of international trade between one country and all other countries is called ________ of payments.

balance

When aggregate demand rises too much to decrease aggregate demand, we can use ______ monetary policy.

contractionary

An account entry that records the value of a good service financial asset or other asset that is exported from one country to another is called a(n)

credit

An account entry that records the value of a good service financial asset or other asset that is exported from one country to another is called a(n):

credit

This is an account entry that records the value of a good service financial asset or other asset that is imported from one country to another is called a(n):

credit

The interaction of the supply of and the demand for a _______ determines the equilibrium exchange rate.

currency

An account within the balance of payments that summarizes international trade in goods services and income payments is called the _______ account.

current

While on a vacation in Europe you use U.S. dollars to buy $500 worth of souvenirs. This transaction is a $500 debit in the _______ account.

current

If the purchasing power of the U.S. dollar _____ relative to other currencies, it is known as an depreciation of the U.S. dollar.

decreases

The amount by which a country's imports of goods and services (M) are greater than its exports of goods and services (X) is called a trade ______

deficit

You are going on a trip to the United Kingdom in a few months and need British pounds to use during your travels. This represents the --______ for British pounds.

demand

An increase in inflation in the foreign economy will cause foreign currency:

demand to decrease foreign currency supply to increase and result in depreciation of the foreign currency.

An increase in inflation in the U.S. will cause foreign currency:

demand to increase foreign currency supply to decrease and result in appreciation of the foreign currency.

Suppose income in the U.S. falls. This will affect the ______ side of the foreign exchange market and cause exchange rates to ______

demand, decreases

Suppose income in the U.S. rises. This will affect the ________ side of the foreign exchange market for euros and cause the dollars per euro exchange rate to _______

demand, increase

An increase in inflation in the foreign economy will cause foreign currency ______ to decrease and foreign currency ______ to increase resulting in _______ of the foreign currency.

demand, supply, depreciation

When the dollar ______, foreign goods and services become more expensive to U.S. consumers and currency _______ fall.

depreciates, imports

When the dollar ________ , foreign goods and services become more expensive to U.S. consumers and ______ fall.

depreciates, imports

In the United States, when we talk about the value of a good or service, we speak in dollars. This means that it is the ________ currency of the United States.

domestic

The exchange rate that is determined by the interaction of the demand for and supply of the currency is the _______ exchange rate.

equilibrium

The exchange rate that is determined by the interaction of the demand for and supply of the currency is the:

equilibrium exchange rate.

The _______ rate is the rate or price at which one currency can be converted to another.

exchange

Net exports is the difference between ______ and _______ .

exports, imports

An account within the balance of payments that summarizes international trade in financial assets such as currencies stocks and bonds is called the ______ account.

financial

An account within the balance of payments that summarizes international trade in financial assets such as currencies stocks and bonds is called the ________ account.

financial

An account within the balance of payments that summarizes international trade in financial assets, such as currencies, stocks, and bonds is called the:

financial account.

An exchange rate that changes as demand and supply for the currency change is a(n) ______ exchange rate.

flexible

Foreign exchange markets are characterized by:

flexible exchange rates.

_____ currency is the currency or money used in foreign countries.

foreign

Government holdings of foreign currencies are known as:

foreign reserves

If the purchasing power of the U.S. dollar ________ relative to other currencies, it is known as an appreciation of the U.S. dollar.

increases

The foreign exchange market:

is a market in which people exchange one currency for another currency.

What is a downside to a country adopting a fixed exchange rate?

It is very difficult to maintain a fixed exchange rate.

In the foreign exchange market, the exchange rate is measured as:

U.S. dollar/unit of foreign currency.

The balance of payments refers to:

a collection of national income accounts that summarize the flow of international trade between one country and all other countries.

A trade deficit is also called:

a current account deficit.

A trade surplus is also called:

a current account surplus.

The demand for foreign currencies is:

a derived demand

he supply of dollars on the foreign exchange market is the:

amount of dollars that Americans are willing to exchange for foreign currency so that they can purchase foreign goods services and assets.

A flexible exchange rate is:

an exchange rate that changes as demand and supply for the currency change.

Kisho works for a technology company in Japan. His company is sending him on a business trip to the United States to recruit new workers. Does this describe the supply or demand for yen (Japanese currency)?

supply

When we discuss the amount of dollars that Americans are willing to exchange for foreign currency so that they can purchase foreign goods services and assets, we are referring to the _______ of dollars

supply

Suppose interest rates in the U.S. fall. This will affect the supply ______ side of the foreign exchange market and cause exchange rates to ______

supply, increase

If foreign currency trades for more dollars, then U.S. firms:

that export their products would benefit.

If foreign currency trades for fewer dollars, then U.S. firms:

that import their products would benefit.

Suppose the Current Account + Financial Account + Capital Account = $0. This describes:

the balance of payments identity.

A collection of national income accounts that summarize the flow of international trade between one country and all other countries is called:

the balance of payments.

The rate or price at which one currency can be exchanged for another is called:

the exchange rate.

The exchange rate is:

the rate or price at which one currency can be exchanged for another.

In the market for dollars, the exchange rate is measured as:

unit of foreign currency/U.S. dollar.

Which of the following describes the financial account?

An account within the balance of payments that summarizes international trade in financial assets such as currencies stocks and bonds.

Which of the following describes the current account?

An account within the balance of payments that summarizes international trade in goods, services, and income payments.

Which of the following describes the capital account?

An account within the balance of payments that summarizes international trade in non-financial and non-produced assets such as patents and copyrights.

Which of the following describes a fixed exchange rate?

An exchange rate that is set at a specific value and maintained over time.

Which of the following describes the balance of payments identity?

Current Account + Financial Account + Capital Account = $

If the supply of Euros decreases, what will happen to the exchange rate between Euros and US Dollars?

Exchange rate increases.

_____ are generally used to settle international transactions and conduct exchange rate policy.

Foreign reserves

If the demand for a currency increases under a fixed exchange rate, what must a country do to maintain the fixed rate?

Increase the supply of its currency

If foreign currency trades for fewer dollars, then vacations in other countries have become _________ expensive; international tourists are ______ likely to come to the U.S. and spend their money.

less, less

A lower exchange rate means that people who hold euros receive ________ dollars for each euro exchanged, making goods priced in dollars ________ expensive to them.

less, more

A higher exchange rate means that people who hold euros receive:

more dollars for each euro exchanged making goods priced in dollars less expensive to them.

Exports minus imports equals ______ exports.

net