Term
| foreign exchange rates / currency exchange rates |
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Definition
| Necessary because there is no international currency |
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Term
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Definition
| Money issued by large countries with reliable and predictably stable economies |
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Definition
-not widely accepted
-usually limited to home country or region |
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Definition
| Value rises against another currency |
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Term
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Definition
When a currency depreciated against another currency:
-It's value lowers
-Other currency appreciates
-It's exports become cheaper
A currency can depreciate because of a lower demand for the currency |
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Term
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Definition
| buy and sell enough of its own currency to alter exchange rate |
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Definition
| betting that value or market price will go up |
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Definition
-existed until the end of WWI
-fixed-exchange rate
-fixed/pegged |
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Term
| fixed exchange rate system |
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Definition
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Term
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Definition
| Current account & capital/financial account |
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Term
| sovereign wealth funds SWFs |
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Definition
| generated from international transactions |
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Definition
-flexible exchange-rate system
-currency value more easily determined by market forces
-Three Foreign Rate Exchange Systems |
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Term
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Definition
Government rules and regulations that seek to limit/control inflows and outflows of money
-maintain oder
-prevent financial and foreignexchange instability |
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Definition
| committed G5 states to work together to realign the dollar to depreciate in order to raise interest rates in other countries |
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Definition
States want 3 things at the same time:
1)monetary autonomy
2) international capital mobility
3) stable exchange rates |
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Definition
| act in own interest or save group |
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Term
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Definition
-Controlled by Central Banks
-Changing interests rates
-changing money supply |
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Definition
-Controlled by government
-taxes
-government expenditures |
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Definition
Great Britain
US
West Germany
France
Japan |
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Definition
-exports
-payment on investmnts
-balance of payment deficit=negative balance in current account |
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Term
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Definition
-foreign direct investment
-sell assets (Disney, Rockefeller)
-borrow |
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Term
| Bretton Woods System – 1944 |
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Definition
fixed exchange rates (flexible)
Three Foreign Rate Exchange Systems |
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