Econ 270: INTERNATIONAL ECONOMICS

REVIEW GUIDE for the THIRD EXAM:

1. A little international income accounting

the current account

the capital account

The current account and the macro-economy

S + (T-G) = I + CA be able to explain this

Assessing current account deficits and surpluses

2. Exchange Rates, Determination and Systems

Currency Appreciation and Depreciation

The Demand and Supply of Foreign Exchange

Downward sloping demand for foreign exchange

Upward sloping supply of foreign exchange

Equilibrium in the foreign exchange market

Shifts in Demand and/or Supply: impact on exchange rates

Exchange rates and currency trading

the demand and supply of foreign currency

appreciation, depreciation

Equilibrium under floating exchange rates

shifts in the demand and/or supply

Exchange rates in the short term

GDP, real income and exchange rates

interest rates, growth

Exchange rates in the long run

purchasing power parity

the REAL exchange rate