MacEco 6

  1. Foreign Exchange
    currenty and bank deposits that are denominated in foreign money
  2. Foreign Exchange Market
    gobal market in which people trade once currency for another
  3. Exchange Rate
    price of one country's money in terms of another country's money
  4. Appreciation
    • When a currency rises in value in relation to another currency
    • as a country's currency appreciates, int'l demand for its product falls
  5. Depreciation
    • when a currency falls in value in relation to another currency
    • as a country's currency depreciates, goods sell for lower prices in other countries & demand increases
  6. Balance of Payments
    a record of a country's trade in goods, services, and financial assets with the rest of the world
  7. Double-entry Bookkeeping
    a systems of accounting in which every transaction is recorded in a least 2 accounts
  8. Current Account
    sum of the merchandise, services, income and unilateral transfers accounts in the balance of payments
  9. Surplus vs. Deficit
    • Surplus = amount by which credits exceed debits
    • Deficit = amount by which debits exceed credits
  10. Balance of Trade
    balance in the merchandise account in a nation's balance of payments
  11. Financial Account
    record in the balance of payments of the flow of financial assets into and out of a country
Card Set
MacEco 6
Chapter 6, Foreign Exchange Market