Campbell R. McConnell,
University of Nebraska, Lincoln
Stanley L. Brue,
Pacific Lutheran University
Thomas P. Barbiero,
Ryerson University
| Balance of payments | A summary of all the transactions that took place between the individuals, firms, and government unit of one nation and those in all other nations during a year.
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| Balance of payments deficit | The amount by which the net sum of the balance on current account and the balance on the capital account is negative in a year.
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| Balance of payments surplus | The amount by which the net sum of the balance on current account and the balance on the capital account is positive in a year.
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| Balance on goods and services | The exports of goods and services of a nation less its imports of goods and services in a year.
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| Bretton Woods system | The international monetary system developed after World War II in which adjustable pegs were employed, the International Monetary Fund helped to stabilize foreign exchange rates, and gold and the dollar were used as international monetary reserves.
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| Capital account | The section of a nation's international balance of payments statement that records the foreign purchases of assets in Canada (producing money capital inflows) and Canadian purchases of assets abroad (producing money capital outflows of that nation).
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| Currency intervention | A government's buying and selling of its own or of foreign currencies to alter international exchange rates.
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| Current account | The section in a nation's international balance of payments that records its exports and imports of goods and services, its net investment income, and its net transfers.
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| Devaluation | A decrease in the governmentally defined value of a currency.
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| Exchange control | See Foreign exchange control.
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| Fixed exchange rate | A rate of exchange that is set in some way and hence prevented from rising or falling with changes in currency supply and demand.
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| Flexible exchange rate | A rate of exchange determined by the international demand for and supply of a nation's money; a rate free to rise or fall (to float).
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| Floating exchange rate | See Flexible exchange rate.
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| Gold standard | A historical system of fixed exchange rates in which nations defined their currency in terms of gold, maintained a fixed relationship between their stock of gold and their money supplies, and allowed gold to be freely exported and imported.
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| International Monetary Fund (IMF) | The international association of nations that was formed after World War II to make loans of foreign monies to nations with temporary payments deficits and, until the early 1970s, to administer the adjustable pegs; it now mainly makes loans to nations facing possible defaults on private and government loans.
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| Managed floating exchange rate | An exchange rate that is allowed to change (float) as a result of changes in currency supply and demand but at times is altered (managed) by governments via their buying and selling of particular currencies.
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| Official international reserves | See Official reserves.
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| Purchasing power parity | The idea that exchange rates between nations equate the purchasing power of various currencies; exchange rates between any two nations adjust to reflect the price level differences between the countries.
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| Trade balance | The export of goods (or goods and services) of a nation less its imports of goods (or goods and services).
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| Trade deficit | The amount by which a nation's imports of goods (or goods and services) exceed its exports of goods (or goods and services).
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| Trade surplus | The amount by which a nation's exports of goods (or goods and services) exceed its imports of goods (or goods and services).
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2002 McGraw-Hill Higher Education