Balance of payments accounts Balance of payments on the current account (the current account) Balance of payments on goods and services Merchandise trade balance (trade balance) Balance of payments on the financial account (the financial account) Foreign exchange market Exchange rates Appreciates Depreciates Equilibrium exchange rate Real exchange rate Purchasing power parity Exchange rate regime Fixed exchange rate Floating exchange rate Exchange market intervention Foreign exchange reserves Foreign exchange controls Devaluation Revaluation | an increase in the value of a currency that is set under a fixed exchange rate regime. an exchange rate regime in which the government lets the exchange rate go wherever the market takes it. government purchases or sales of currency in the foreign exchange market. the exchange rate at which the quantity of a currency demanded in the foreign exchange market is equal to the quantity supplied. the difference between a country’s exports and imports of goods alone—not including services. the price at which currencies trade, determined by the foreign exchange market. a reduction in the value of a currency that is set under a fixed exchange rate regime. (of currency) a rise in the value of one currency in terms of other currencies. (between two countries’ currencies) the nominal exchange rate at which a given basket of goods and services would cost the same amount in each country. licensing systems that limit the right of individuals to buy foreign currency. a rule governing policy toward the exchange rate. an exchange rate regime in which the government keeps the exchange rate against some other currency at or near a particular target. the exchange rate adjusted for international differences in aggregate price levels. a country’s balance of payments on goods and services plus net international transfer payments and factor income. stocks of foreign currency that governments can use to buy their own currency on the foreign exchange market. a summary of a country’s transactions with other countries, including two main elements: the balance of payments on the current account and the balance of payments on the financial account. the difference between the value of exports and the value of imports during a given period. the market in which currencies are traded. the difference between a country’s sales of assets to foreigners and its purchases of assets from foreigners during a given period. (of currency) a fall in the value of one currency in terms of other currencies. |
Balance of payments accounts
Balance of payments on the current account (the current account)
Balance of payments on goods and services
Merchandise trade balance (trade balance)
Balance of payments on the financial account (the financial account)
Foreign exchange market
Exchange rates
Appreciates
Depreciates
Equilibrium exchange rate
Real exchange rate
Purchasing power parity
Exchange rate regime
Fixed exchange rate
Floating exchange rate
Exchange market intervention
Foreign exchange reserves
Foreign exchange controls
Devaluation
Revaluation