Glossary Category: International Trade - Page 4 - 3auk

real exchange rate

The real exchange rate (RER) measures the actual price of goods and services between two countries. It adjusts

The nominal exchange rate is the price of one currency in terms of another currency in the foreign

The Effective Exchange Rate (EER) is an index that measures the value of a currency compared to a

The J curve explains how a country’s trade balance changes after its currency loses value (depreciates). It describes

The Marshall-Lerner condition explains that a depreciation of a country’s currency will only improve its current account balance

Currency depreciation happens when the market value of a currency decreases compared to other currencies in an exchange

A protectionist policy refers to government actions taken to shield local businesses from foreign competition by making it

Expenditure-reducing policies are economic strategies used to lower the total amount of money spent within a country. The

Expenditure-switching policies are economic strategies used to move spending away from foreign products toward products made within a

The capital account is a part of a country’s balance of payments. It records the movement of capital