Term
| Balance of Payments Accounts |
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Definition
| A summary record of a country's transactions with the rest of the world, including the buying and selling of goods, services and assets |
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Term
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Definition
| The part of the balance of payments accounts that records payments and receipts arising from trade in goods and services and from interest and dividends that are earned by capital owned in one country and invested in another |
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Term
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Definition
| In the balance of payments, this account records the value of exports and imports of goods and services |
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Term
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Definition
| In the balance of payments, this account records the payments and receipts that represent income on assets (such as interest and dividends) |
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Definition
| The part of the balance of payments accounts that records payments and receipts arising from the purchase and sale of assets |
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Definition
| The number of units of domestic currency required to purchase one unit of foreign currency |
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Definition
| A fall in the exchange rate - the domestic currency has become more valuable so that it takes fewer units of domestic currency to purchase one unit of foreign currency |
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Definition
| A rise in the exchange rate - the domestic currency has become less valuable so that it takes more units of domestic currency to purchase one unit of foreign currency |
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Definition
| An exchange rate that is left free to be determined by the forces of demand and supply on the free market, with no intervention by central banks |
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Definition
| An exchange rate that is maintained within a small range around its publicly stated par value by the intervention in the foreign-exchange market by a country's central bank |
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Definition
| A system in which exchange rates are fixed in the short term but are occasionally changed in response to changes in economic events |
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Term
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Definition
| A situation in which the central bank intervenes in the foreign-exchange market to smooth out some of the large, short-term fluctuations in a country's exchange rate, while still leaving the market to determine the exchange rate in the longer term |
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Term
| Purchasing Power Parity (PPP) |
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Definition
| The theory that over the long term, the exchange rate between two currencies adjusts to reflect relative prive levels |
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