Please enable JavaScript.
Coggle requires JavaScript to display documents.
Unit 5 (balance of payments (interest rates and capital flow (exchange…
Unit 5
balance of payments
all international transactions
accounts
current account
parts
net expoerts
investment income
income from factors of production
net transfers
money flows from the private or public sectors
difference between a nation´s exports of goods and services and its import of goods and services
finansial account
measures the purchase and sale of financial assets abroad
examples
an merican buys a japanese gov. bond
a korean company buys a factory in ohio
concepts
net capital outflow
the difference between the purchase of foreign and domestic assets purchased by foreigners
financial account surplus
inflow > outflow
interest rates and capital flow
Intrest rate (upp) -> inflow (upp) outflow (down)
exchange rate
depreciation
loss in value of a country´s currency (weaker)
appreciation
increase in value of the country´s currency (stronger)
graph
demand an supply for currency (FOREX)
the foreign country demand and the domestic supply
shifters
change in taste
income
change in relative price level (inflation)
change in relative interest rate
exchange rate regimes
floating exchange rate
the market determine the value of the country´s currency
fixed exchange rate
the government activity manages the country´s currency
balance of trade
net exports
Exports - imports
trade surplus
exports > imports
trade deficit
imports > exports
only goods and services