Indifference Curve: A diagram that express the consumption preferences of an individual consumer./An indifference curve represents a series of combinations between two different economic goods, between which an individual would be theoretically indifferent regardless of which combination he received.
Comparative Advantage: A country has comparative advantage in a good if the product has a lower pretrade relative price than is found elsewhere in the world.
J Curve: A country's currency depreciation or appreciation, the country's trade balance and the current account balance of payments generally don’t improve or worsen immediately, often over a period of time. Owing to the changes in the current account balance of payments trajectory into the shape of a letter J, so called J curve.
Trade Creation: An expansion in world trade that results from the formation of a preferential trade arrangement.
Purchasing power parity (PPP):PPP is a theory in economics that approximates the total adjustment that must be made on the currency exchange rate between countries that allows the exchange to be equal to the purchasing power of each country's currency.
The Heckscher-Ohlin Theorem: A country will have comparative advantage in,and therefore will export that good whose production is relatively intense in the factor with which that country is relatively well endowed.
General Equilibrium Model: general equilibrium theory attempts to explain the behavior of supply, demand, and prices in a whole economy with several or many interacting markets, by seeking to prove that the interaction of demand and supply will result in an overall (or "general") equilibrium.
Covered Interest Arbitrage无风险套利: Covered interest arbitrage is a strategy in which an investor uses a forward contract to hedge against exchange rate risk. Covered interest rate arbitrages the practice of using favorable interest rate differentials to invest in a higher-yielding currency, and hedging the exchange risk through a forward currency contract.
无风险套利是一种金融工具，是指把资本(一般是货币)投资于一组外汇中，规定远期汇率，取得外汇的存款收益后按既定的汇率将外汇换回本币，从而获得高于国内存款利率的收益。也就是套利的同时进行保值，锁定了汇率，这就称为无风险套利。
The Law of One Price: When openness to trade and transaction cost is zero, the same wherever the sale of goods, in the same currency to represent the goods prices are the same.
Normative Analysis: Economic analysis that makes value judgments regarding what is or should be.
Balance of Payments: A statement that summarizes an economy’s transactions with the rest of the world for a specified time period.
The Monetary Approach: Monetary analysis that monetary supply and demand determine a country's international balance of payments theory of international balance of payments, emphasizes the balance of payments is essentially a monetary phenomenon, decided to the balance of payments is the key to the relationship between the monetary supply and demand. The Leotief Paradox: The finding that U.S. Exports tend to come from labor-intensive techniques. Production Possibility Frontier(PPF): A diagram that shows the maximum amount of one type of good that can be produced in an economy,given the production of the other.
Interest Rate Parity: The forward premium or discount is equal to the interest differential.
