Enhance Your Learning with Economics - Exchange Rate Systems Flash Cards for quick learning
The rate at which one currency can be exchanged for another.
An exchange rate system where the value of a currency is fixed to the value of another currency or a basket of currencies.
An exchange rate system where the value of a currency is determined by market forces, such as supply and demand.
An exchange rate system where the value of a currency is fixed to a specific value, usually a major currency like the US dollar.
An exchange rate system where the value of a currency is allowed to fluctuate within a certain range, but central banks intervene to stabilize the currency.
Institutions that issue and regulate a country's currency, often with a fixed exchange rate to a major currency.
A situation where a country's currency experiences a sharp decline in value, often leading to financial instability.
The set of rules and policies that govern the exchange rate system of a country or group of countries.
The process by which the value of a currency is determined in the foreign exchange market.
The changes in the value of a currency relative to other currencies over time.
The strategies and actions taken by a government or central bank to influence the value of its currency in the foreign exchange market.
The potential for losses or gains due to changes in exchange rates.
The market where currencies are bought and sold, facilitating international trade and investment.
A record of all economic transactions between the residents of a country and the rest of the world over a specific period of time.
An international organization that provides financial assistance and promotes monetary cooperation among countries.
The deliberate actions taken by a government or central bank to influence the value of its currency in order to gain an unfair advantage in international trade.
A decrease in the value of a currency relative to other currencies.
An increase in the value of a currency relative to other currencies.
A deliberate decrease in the value of a currency relative to other currencies, usually done by a government or central bank.
A deliberate increase in the value of a currency relative to other currencies, usually done by a government or central bank.
The ease with which a currency can be converted into another currency or used for international transactions.
Foreign currencies held by a central bank or monetary authority as a means to stabilize the domestic currency and facilitate international transactions.
The buying or selling of a currency by a government or central bank in order to influence its value in the foreign exchange market.
The buying or selling of a currency with the expectation of making a profit from changes in its value.
Financial contracts that obligate the buyer to purchase or sell a specific amount of a currency at a predetermined price and date in the future.
Financial derivatives that give the holder the right, but not the obligation, to buy or sell a specific amount of a currency at a predetermined price and date in the future.
Agreements between two parties to exchange a specific amount of one currency for another currency at a predetermined rate, with the obligation to reverse the transaction at a later date.
Strategies used by individuals or businesses to reduce the risk of adverse movements in exchange rates.
The practice of taking advantage of price differences in different currency markets to make a profit.
A strategy where an investor borrows money in a low-interest-rate currency and invests it in a high-interest-rate currency to earn the interest rate differential.
A fixed exchange rate regime where a country's currency is tied to the value of another currency or a basket of currencies.
A weighted average of several currencies used as a reference for a country's exchange rate.
A situation where countries engage in competitive devaluations or other measures to gain a trade advantage.
A group of countries that share a common currency and monetary policy.
The group of European Union countries that have adopted the euro as their common currency.
A monetary system established after World War II, where currencies were pegged to the US dollar and the dollar was pegged to gold.
A monetary system where the value of a currency is directly linked to a fixed quantity of gold.
The framework of rules, institutions, and procedures that govern international monetary relations.
The actions taken by a central bank to manage the money supply and interest rates to achieve macroeconomic objectives.
The use of government spending and taxation to influence the economy.
A sustained increase in the general price level of goods and services in an economy over a period of time.
The cost of borrowing or the return on investment, expressed as a percentage.
Government-imposed restrictions on the movement of capital in and out of a country.
Investment made by a company or individual in one country into business interests located in another country.
The increasing interconnectedness and interdependence of countries through the exchange of goods, services, information, and ideas.