Details Title: Ch 16:International Finance Description: Unit 6 - Foundations of Macroeconomics Total Flash Cards: 19 Created: 02/05/2008 12:41:02		New Users: To study from this flashcard set, or to create your own your own study flash cards, REGISTER HERE. Existing Users: CLICK HERE. Additional Economics Flashcards
Cards in this set: Term Definition Term Balance of payments accounts Definition The accounts in which a nation records its international trading, borrowing and lending in a given period Term Current Account Definition Record of international receipts and payments in a given period - current account balance equals export minus imports, plus net interest and transfers received from abroad Term Capital Account Definition Record of foreign investment into Canada minus Canadian investment abroad in a given period Term Official settlements Account Definition Record of the change in Canadian official reserves in a given period Term Canadian official reservces Definition The governments holdings of foreign currency Term Net borrower Definition A country that is borrowing more from the rest of the world than it is lending to the rest of the world Term Net Lender Definition A country that is lending more to the rest of the world that it is broowing from the rest of the world Term Debtor nation Definition A country that during its entire history has borrowed more from the rest of the world than it has lent to it Term Creditor Nation Definition A country that duing its entirehistory has invested more in the rest of the world than other countries invested in it Term Private Sector Balance Definition Saving minus investment Term Government sector balance Definition Net taxes minus government expenditure on goods and services Term Foreign Exchange market Definition The market in which the currency of one country is exchanged for the currency of another Term Foreign exchange rate Definition The price at which one currency exchanges for another Term Currency appreciation Definition The rise in the value of one currency in terms of another currency Term Currency depreciation Definition The fall in the value of one currency in terms of another currency Term Canadian interest rate differential Definition The Canadian interest rate minus the foreign interest rate Term Purchasing Power Parity Definition Equal value of money - a situation in which money buys the same amount of goods and services in different currencies Term Interest rate parity Definition Equal inerest rates - a situation in which the interest rate in one currency equals the interest rate in another currency when exchange rate changes are taken into account