ECON 105 Chapter Notes - Chapter 12: Real Interest Rate, Exchange Rate, Canadian Dollar
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ECON 105 Full Course Notes
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Document Summary
Closed economy: an economy that does not interact with other economies in the world. Open economy: an economy that interacts freely with other economies around the world. The flow of goods: exports, imports, and net exports. Exports: goods and services that are produced domestically and sold abroad. Imports: goods and services that are produced abroad and sold domestically. Trade balance: the value of a nations exports minus the value of its imports; also called net exports. Trade surplus: an excess of exports over imports: a country sells more than it buys. Trade de cit: an excess of imports over exports: a country buys more than it sells. Balanced trade: a situation in which exports equal imports. Factors that in uence exports, imports, and net exports. Tastes of consumers for domestic and foreign goods. Prices of goods at home and abroad. Exchange rates at which people can use domestic currency to buy foreign currencies. Incomes of consumers at home and abroad.