24708049
Description
Flashcards by Sophia Lynch, updated more than 1 year ago
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Created by Sophia Lynch
over 4 years ago
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| Question | Answer |
| Equilibrium in an open economy: What two markets are involved in this model? | 1. The market for loanable funds 2. The market for foreign currency exchange |
| What is NCO? | Net capital outflow. The net flow of funds being invested abroad by a country during a certain period of time. A positive NCO means that the country invests outside more than the world invests in it. |
| What happens to net exports and the current account balance when the exchange rate increases? | Net exports decrease and the current account balance also decreases. |
| What is 'trade policy'? | Tariffs and import quotas |
| What does 'capital flight' mean? | When an economy doesn't look too good, people from that country will invest in other countries. |
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