Chapter 32: A Macroeconomic Theory of the Open Economy Flashcards
1
Q
Twin deficits
A
The government budget deficit and the trade deficit
2
Q
Trade policy
A
A government policy that directly affects the quantity of a country’s imports or exports
3
Q
Tariff
A
A tax on imported goods
4
Q
Import quota
A
A limit on the quantity of a good that is produced abroad that can be sold domestically
5
Q
Capital flight
A
A sudden reduction in the demand for domestic assets coupled with a sudden increase in the demand for foreign assets
