ECON 1100 Chapter Notes - Chapter 14: Foreign Portfolio Investment, Foreign Exchange Market, The Foreign Exchange

• School: University of Guelph
• Department: Economics
• Course: ECON 1100
• Professor: Pat Martin

Document Summary

Open economy: an economy that has interactions in trade or finance with other countries. Closed economy: an economy that has no interactions in trade or finance with other countries. Balance of payments: the record of a country"s trade with other countries in goods, services, and assets. Current account: the part of the balance of payments that records a country"s net exports, net income on investments, and net transfers. Balance of trade: the difference between the value of goods a country exports and the value of goods a country imports. Financial account: the part of the balance of payments that records purchases of assets a country has made abroad and foreign purchases of assets in the country. Net foreign investment: the difference between capital outflows from a country and capital inflows, also equal to net foreign direct investment plus net foreign portfolio investment.