Current Account Deficit
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A current account deficit occurs when a country spends more money on the goods and services it imports than it receives for the goods and services it exports.
The Big Mac Index is an informal way to gauge the values of currencies around the world against the U.S. dollar.
A financial market with declining asset prices fueled by investors’ pessimism, lack of confidence and negative expectations. While bear markets are partly based on actual investment performance, they are also partly based on investor psychology.
Purchasing Power Parity (PPP) compares different countries' currencies through a market "basket of goods" approach. Two currencies are in PPP when a market basket of goods (taking into account the exchange rate) is priced the same in both countries.
Financialization is an increase in the size and importance of a country's financial sector relative to its overall economy.
The Consumer Confidence Index is the result of a monthly survey of 5,000 U.S. households by the Conference Board that measures how optimistic or pessimistic consumers are about the economy's current and future performance. When the index is high, consumers are expected to increase their spending on goods and services.
The wealth effect is a psychological phenomenon that causes people to spend more as the value of their assets rises. The premise is that when consumers' homes or investment portfolios increase in value, they feel more financially secure, so they increase their spending.
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