Japanese Economy and Business

Where: Macroeconomics of Open Economies Chap.29~30, Page 637~677

Words
1. merchant
Context: In 1950 the average merchant ship carried less than 10,000 tons of cargo.
Definition: Someone who buys and sells goods in large quantities
Example: My father is a merchant seaman.

2. currency
Context: The exchange rates at which people can use domestic currency to buy foreign currencies.
Definition: The system or type of money that a country uses
Example: You can't use foreign currency here.

3. deposit
Context: If the Smiths deposit their saving in a mutual fund,
Definition: To put money or something valuable in a bank or other place where it will be safe
Example: He deposited his will with his oldest son.

4. appreciation
Context: That change is called an appreciation of the dollar.
Definition: A rise in value, especially of land or possessions
Example: An appreciation of 50% in property value.

5. phenomena
Context: For understanding many economic phenomena,
Definition: Something that happens or exists in society, science, or nature, especially something that is studied because it is difficult to understand
Example: A greenhouse effect is a phenomenon of the Earth's atmosphere.

6. involve
Context: It involves looking simultaneously at two related markets
Definition: If an activity or situation involves something, that thing is part of it or a result of it
Example: The investigation involved me in the murder case.

7. vertical
Context: The supply curve is vertical,
Definition: Pointing up in a line that forms an angle of 90° with a flat surface
Example: There is a vertical cliff.

8. depreciation
Context: Because a depreciation of the real exchange rate increases net exports,
Definition: A reduction in the value or price of something
Example: An depreciation of 50% in property value.

9. tariff
Context: One common trade policy is a tariff,
Definition: A tax on goods coming into a country or going out of a country
Example: Lower the tariff 5 %.

10. interact
Context: The U.S. economy interacts with other economies in the world.
Definition: If one thing interacts with another, or if they interact, they affect each other
Example: Tectonic movements interact with an earthquake.

This material is about macroeconomics. I had a presentation yesterday. I talked about the interest rates.
In general if the interest rates decrease there is no advantage to putting your money in a savings account. We can get low interest rate loans, so investments will go up. Foreign investors will not hold the currency because the value or the currency is going down so there is no advantage. Export will increase and imports will decrease. Interest's rates and current exchange rates are closely related. the money will always move to the more profitable market. If the Japanese Yen's interest rate is low and the American dollar's rate is high, the people will hold the more profitable one. Because holding the dollar which has a high interest rate, the Yen will weaken against the dollar. That means the price of goods and services from other countries will be higher and the price of domestic goods and services will also go up, which causes inflation.