CURRENCY
Currency speculation involves the short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates. TRUE or FALSE
What is TRUE
Under the Jamaica Agreement, floating exchange rates were declared acceptable, and gold was abandoned as a reserve asset. TRUE or FALSE
true
Adverse consequences of unpredictable changes in exchange rates is known as
What is Foreign Exchange Risk
Loan in which the borrower promises to repay the borrowed amount plus a predetermined rate of interest.
What is debt.
Involves using taxes and government spending to influence the money supply indirectly.
What is Fiscal Policy
The simultaneous purchase and sale of a given amount of foreign exchange for two different value dates is referred to as a
What is currency swap
The ______ maintains order in the international monetary system
What is IMF
The globe's three most important financial centers
What is London, Toyko, New York
According to ______, in competitive markets free of transportation costs and barriers to trade, identical products sold in different countries must sell for the same price when their price is expressed in terms of the same currency
What is law of one price
Made its largest acquisition ($300 million) in 20 years, is buying a decision-logic technology company to better personalize menus in its digital push.
What is New York
Buying a currency low and selling it high is known as
What is arbitrage
In 1976, the ________ formalized the floating exchange rate system that followed the collapse of Bretton Woods.
What is Jamaica Agreement
The exchange rate is
What is the rate at which one currency is converted into another
The gold standard has it origin in
What is merchantilism / the use of gold coins as a medium of exchange.
Principle that the nominal interest rate is the sum of the real interest rate and the expected rate over inflation over a specific period.
What is Fisher Effect.
The world's four major currencies do this
What is are all free to float against each other
Two factors why Brentton Woods failed
What is Vietnam, Nixon, inflation, dollar could only be devalued if other currencies agreed, speculation that the dollar would decrease
In a _____ exchange rate system, the value of a set of currencies is fixed against each other at some mutually agreed on exchange rate.
What is fixed
Refers to activities that directly affect a nation's interest rate or money supply
What is Monetary Policy
Cyclone Idai's deadly hit has left some 1.85 million people in need of assistance in _______.
Where is Mozambique
A company selling in a country with a strong currency while sourcing from a country with a weak currency _____.
What increases profits.
When is you Application Paper Due
What is April 23
The market consisting of currencies that are banked outside their countries of origin.
What is Eurocurrency Market
Currencies allowed to float against one another, with government intervention to stabilize currencies
What is managed float system.
Simultaneous purchase and sale of foreign exchange for two different dates
What is currency swap.