ECON 1100 Lecture Notes - Lecture 10: Foreign Portfolio Investment, Foreign Exchange Market, Currency Appreciation And Depreciation
11 Dec 2017
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Open economy an economy that has interactions in trade or finance with other countries. Closed economy no interactions in trade or finance with other countries. Balance of payments a re(cid:272)ord of a (cid:272)ou(cid:374)tr(cid:455)"s trade (cid:449)ith other (cid:272)ou(cid:374)tries i(cid:374) goods, services, and assets. Current account part of the (cid:271)ala(cid:374)(cid:272)e of pa(cid:455)(cid:373)e(cid:374)ts that re(cid:272)ords a (cid:272)ou(cid:374)tr(cid:455)"s (cid:374)et e(cid:454)ports, (cid:374)et income on investments, and net transfers. Balance of trade the difference between the value of the 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 a 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. Capital account records relatively minor transactions, such as migrants transfers and sales and purchases of non produced, non financial assets.
