Macroeconomics Chapter 38
Purchasing Power Parity (PPP)
A method of comparing income by looking at the domestic purchasing power of money in differnent countries.
Changing the underlying economic institutions.
The existence of two sectors: a traditional sector and an internationally oreinted modern market sector.
A change in the entire atmosphere within which the government and the economy interrelate.
A change in one aspect of the government’s actions, such as monetary policy or fiscal policy.
An inplicit tax on the holders of cash and the holders of any obligations specified in nominal terms.
Individuals may change dollars into any currency they want for whatever legal purpose they want.
Convertibility on the Current Account
A system that allows people to exchange currencies freely to buy goods and services, but not to buy assets in other countries.
Limited Capital Account Convertibility
A system that allows full acount convertability and partial capial account convertability.
The making of loans that are subject to specific conditions.
Balance of Payments Constraint
Limitations on expansionary domestic macroeconomic policy due to a shortage of international currency reserves.
Funds that developed countries lend or give to developing countries.
Investment in the underlying structure of the economy.
A stage when the development process becomes self-sustaining.
The degrees, or credentials, become more important than the knowledge learned.
The outflow of the best and brightest students from developing countries to developed countries.