Economics · Cheatsheet
Unit 4 · The Global Economy
Chapter 2 · Money & balance
📋 Reference · always available
Exchange rate
Price of a currency. Demand↑ ⇒ appreciation; appreciation ⇒ exports dearer, imports cheaper.
Systems
Floating, fixed (peg), managed float.
Rate drivers
Trade flows, interest-rate differentials (hot money), FDI, speculation, relative inflation.
Balance of payments
Current account
Trade in goods/services + primary & secondary income.
Deficit financing
CA deficit ⇒ financial-account surplus (net capital inflow).