Balance of Payments Accounts - -summary of the country's transactions with other countries


-Current Account - -balance of payments on goods and services plus net international transfer payments and factor income


-Balance of Payments on Goods and Services - -the difference between exports and imports in a given period


-Trade Balance - -the difference between country's exports and imports of goods


-Financial Account - -the difference between its sales of assets to foreigners and its purchases of assets from foreigners during a given period


-Foreign Exchange Market - -currencies are traded


-Exchange Rates - -prices at which currencies trade


-Appreciates - -when a currency becomes more valuable in terms of other currencies


-Depreciates - -when a currency becomes less valuable in terms of other currencies


-Equilibrium Exchange Rate - -the exchange rate at which the quantity of a currency demanded in the foreign exchange market is equal to the quantity supplied


-Real Exchange Rates - -exchange rates adjusted for international differences in aggregate price levels


-Purchasing Power Parity - -the nominal exchange rate at which a given basket of goods and services would cost the same amount in each country


-Exchange Rate Regime - -a rule of governing policy toward the exchange rate


-Fixed Exchange Rate - -government keeps the exchange rate against some other currency or near a particular target


-Floating Exchange Rate - -governments lets the exchange rate go wherever the market takes it


-Exchange Market Intervention - -government purchases or sales of currency in the foreign exchange market constitute


-Foreign Exchange Reserves - -stocks of foreign currency that governments maintain to buy their own currency on the foreign exchange market

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