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Chapter 18 Reflection

Seeing how the flow of goods and services is related to the flow of capital in international markets is interesting. Selling a good to a foreign party increases your exports, and when you buy foreign products with the foreign currency you have received you are increasing imports.

The question of whether domestic citizens or foreign people are investing more heavily will determine whether there is a trade surplus or deficit. But this is a multi-faceted label, and more factors must be observed in order to determine how it affects a nation's well-being.

I'm curious to know more about the economic changes that occurred when the EU countries initially adopted the Euro. How did the differing exchange rates determine how many Euros each country would be given? How did that affect their ability to grow?

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