The Transition to Floating Exchange Rate Regimes in the 1970s

question 68

True/False

The transition to floating exchange rate regimes in the 1970s (described in Chapter .3) changed the focus from the total BOP to its various subaccount like the current and financial account balances.

---

Definitions:

Aggregate Demand Curve

The total demand curve illustrates the overall volume of goods and services the economy requires at various price points.

Investment Demand Curve

A graph showing the relationship between the rate of interest and the total amount of investment demanded by all sectors in the economy.

Market Interest Rate

The prevailing rate at which borrowers can secure loans and lenders receive returns, determined by supply and demand in the money market.

Autonomous Spending

Spending that does not depend on the current level of national income or output, such as investments, government spending, and exports.