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PHYSICAL WEALTH, AGGREGATE DEMAND DETERMINANT: One of several specific aggregate demand determinants assumed constant when the aggregate demand curve is constructed, and that shifts the aggregate demand curve when it changes. An increase in the physical wealth causes a decrease (leftward shift) of the aggregate curve. A decrease in the physical wealth causes an increase (rightward shift) of the aggregate curve. Other notable aggregate demand determinants include interest rates, federal deficit, inflationary expectations, and the money supply.

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INTERNATIONAL FINANCE: The economic interaction among different nations involving the monetray payments and the exchange of currency. The cornestone of international finance is foreign exchange, including foreign exchange markets and exchange rates. International trade, the study of trade between nations, is a related area of international economics. A summary of international trade undertaken by a particular nation is given with the balance of payments.

     See also | international economics | international trade | balance of payments | foreign exchange | foreign exchange market | exchange rate |


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TAX EFFICIENCY

Taxes, mandatory payments used to finance government operations, inherently disrupt the allocation of resources. This disruption might be good, correcting an otherwise inefficient allocation caused by pollution or market control. However, for an already efficiency allocation, a tax creates and inefficient wedge between the demand price and the supply price. This tax is generally paid partially by buyers and partially by sellers, which the tax incidence. Inefficiency arises because a tax reduces the total amount of consumer surplus and producer surplus, which is deadweight loss.

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There were no banks in colonial America before the U.S. Revolutionary War. Anyone seeking a loan did so from another individual.
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