As countries engage in trade, one variable that will arise and needs to be dealt with is the currency pair: I am in Portugal, you are in the US, we do business together and you pay me in euros. Same thing if I buy something from you I’ll pay it in US Dollars....
What is the Balance Of Payments? In Macro Economics, Economists measure inflows and outflows of money into and out of the Country. This flow is called the Balance of Payments. “Balance” because the inflow balances with the outflow. The BOP has four main...
What is the Difference Between the CPI, GDP deflator, and PCE deflator? Economists study changes in the Economy. One tool used is price indexes. A price index is a measure of how prices change over a period of time: it is a way to measure inflation and here are a...
What is the Gross Domestic Product (GDP)? Gross domestic product (GDP) is the monetary value of the total output of a country. Both nationals and foreigners count: besides a national company, it can also be a foreign factory within a country – it is also...
What is the Loanable Funds Market? The loanable funds market represents the interaction of borrowers and savers in the Economy: Borrowers demand loanable funds and savers supply loanable funds. The market is in equilibrium when the real interest rate has adjusted so...
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