trade deficit
An imbalance in international trade in which the value of imports exceeds the value of exports. (U.S.)
trade surplus
when a country exports more than it imports
current account
A category of balance of payments transactions that measures the exchange of merchandise, the exchange of services, and unilateral transfers.
financial account
Measures the flow of funds for investment in real assets, such as factories or office buildings, or financial assets, such as stocks, between a nation and the rest of the world
foreign exchange market
A market for converting the currency of one country into that of another country.
exchange rate determination
Exchange rate of each currency in terms of another determined by market demand and supply conditions for each currency.
appreciation
An increase in the value of a currency as measured by the amount of a foreign currency it can buy, resulting from in increase in demand for that currency
depreciation
A decrease in exchange rate in a floating exchange rate system due to in increase in supply of the currency in the foreign exchange market
Foreign Exchange Graph
graphic depiction of a country's currency compared to another country's currency; x-axis is quantity of the country's money (Demanded or supplied), y-axis is the value of the foreign currency compared to the country's currency