AP Macroeconomics Unit 6

Front

The more valuable currency has

Back

appreciated

Front

When a country's currency appreciates, its exports ____

Back

become more expensive

Front

Difference between sale of assets to foreigners and purchases of assets from foreigners is called_____

Back

financial account

Front

A country's ____ accounts are a summary of their transactions with other countries

Back

Balance of payment

Front

The price of one nation's currency expressed in terms of another's currency is called

Back

exchange rate

Front

What is a 'Fixed Exchange Rate'?

Back

the government/central bank entirely or predominantly determines the exchange rate.

Front

A floating exchange rate is a regime where the currency price is set by the

Back

forex market based on supply and demand compared with other currencies.

Front

What is the difference between a fixed and a floating exchange rate?

Back

A fixed exchange rate is set by the monetary authority with respect to a foreign currency or a basket of foreign currencies, a floating exchange rate is determined in foreign exchange markets depending on demand and supply, and it generally fluctuates constantly.

Front

if 1 $ = Rs. 50, and if rises to 1 $ = Rs. 60 it will be called

Back

depreciation

Front

If 1 $ = Rs. 50 and now it becomes 1 $ = Rs 40 it will be called

Back

appreciation