Overview
Capital flows are crucial in understanding how money moves across borders for investment and trade. They can significantly influence currency values, which are determined by various factors, including economic stability and interest rates. Understanding these concepts helps in making informed invest...
Key Terms
Example: Foreign investments in local businesses are a form of capital flow.
Example: A U.S. company opening a factory in India.
Example: Buying shares of a foreign company.
Example: 1 USD = 0.85 EUR.
Example: A country’s trade balance is part of its balance of payments.
Example: Exports minus imports contribute to the current account.