balance of payments

Economies send currency to, and receive currency from, other countries {balance of payments}| {payments balance}.

demand

Currency demand increases with exports, foreign investment, foreign loan payments, and gold purchases.

supply

Currency supply increases with imports, overseas military operations, loans to other countries, and gold inflows.

exchange

Currency values vary relative to other currencies. National economies can use exchange-rate system {fixed exchange rate}. In open currency markets, currency exchange rates vary by demand and supply. Currency values depend on purchasing power, which relates to interest rates. Open currency markets can have wide exchange-rate fluctuations, making international trade more difficult.

institutions

Central banks try to keep currency-exchange rates within fixed ranges, by buying and selling currency to control market. International Monetary Fund (IMF) lends money to countries and regulates international financial and currency markets.

Whole Section in One File

6-Economics-Macroeconomics-International Trade

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Technical Information

Date Modified: 2022.0224