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EXCHANGE RATE: The price of one nation's currency in terms of another nation's currency. This is often called the foreign exchange rate in that it is the price determined in the foreign exchange market when people buy and sell foreign exchange. The exchange rate is specified as the amount of one currency that can be traded per unit of another.

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SAVING

The after-tax disposable income of the household sector that is not used for consumption expenditures. Saving primarily involves the use of income to purchase legal claims through financial markets rather than the direct purchase of physical goods and services (which is consumption expenditures). In the circular flow model, saving is the diversion of household income away from consumption expenditures and into the financial markets, which then flows to business investment expenditures and government purchases. Saving is one of two basic uses of disposable income. The other is consumption expenditures.

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Today, you are likely to spend a great deal of time at a flea market seeking to buy either a pleather CD case or a how-to book on fine dining. Be on the lookout for door-to-door salesmen.
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