Term
|
Definition
| A system under which the exchange rate for converting one currency into another is continuously adjusted depending on the laws of supply and demand. |
|
|
Term
|
Definition
| Currency value is fixed relative to a reference currency. |
|
|
Term
|
Definition
| A system under which a country's currency is nominally allowed to float freely against other currencies, but in which the government will intervene, buying and selling currency, if it believes that the currency has deviated too far from its fair value. |
|
|
Term
|
Definition
| A system under which the exchange rate for converting one currency to another is fixed. |
|
|
Term
| European Monetary System (EMS) |
|
Definition
| A system to regulate fixed exchange rates before the introduction of the euro. |
|
|
Term
| International Monetary System |
|
Definition
| Institutional arrangement countries adopt to govern exchange rates. |
|
|
Term
|
Definition
| The practice of pegging currencies to gold and guarenteeing convertability. |
|
|
Term
|
Definition
| The amount of currency needed to purchase one ounce of gold. |
|
|
Term
| Balance of Trade Equilibrium |
|
Definition
| Reached when the income a country's residents earn from exports equals the money residents pay for imports. |
|
|
Term
|
Definition
| System under which some currencies are allowed to float freely, but the majority are either managed by government intervention or pegged to another currency. |
|
|
Term
|
Definition
| Means of controlling a country's currency. |
|
|
Term
|
Definition
| Occurs when a speculative attack on the exchange value of a currency results in a sharp depreciation in the value of the currency or forces authorities to expend large volumes of international currency reserves and sharply increase interest rates to defend the prevailing exchange rate. |
|
|
Term
|
Definition
| A loss of confidence in the banking system that leads to a run on banks, as indiviuals and companies withdraw their deposits. |
|
|
Term
|
Definition
| Situations in which a country cannot service its foreign debt obligations, whether private-sector or government debt. |
|
|
Term
|
Definition
| Arises when people behave recklessly because they know they will be saved if things go wrong. |
|
|
