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ECONOMICS
Chapter 17, Section 3
Measuring Trade - Key

1. Currency is coins and paper bills used as money.

2. Foreign exchange refers to refers to foreign currencies.

3. The exchange rate is the value of a foreign nation’s currency in terms of

the home nation’s currency.

4. Appreciation is an increase in the value of a currency.

5. Depreciation is a decrease in the value of a currency.

6. The foreign exchange market is the banks and other financial

institutions that facilitate the buying and selling of foreign currencies.

7. The balance of trade is the relationship between a nation’s imports and

its exports.

8. A trade surplus is the result of a nation exporting more than it

imports.

9. A trade deficit is the result of a nation importing more than it exports.