Enhance Your Learning with Economics - Exchange Rates Flash Cards for quick learning
The rate at which one currency can be exchanged for another.
The market where currencies are bought and sold, facilitating international trade and investment.
The market where currencies are traded, including spot transactions, forward contracts, and currency swaps.
A record of all economic transactions between residents of a country and the rest of the world over a given period.
An exchange rate regime where the value of a currency is fixed to the value of another currency or a basket of currencies.
An exchange rate regime where the value of a currency is determined by market forces, without government intervention.
The framework within which exchange rates are determined and managed, including fixed, floating, and hybrid regimes.
The process by which the value of a currency is determined in the foreign exchange market.
The actions taken by a central bank to manage the money supply and interest rates to achieve macroeconomic objectives.
The deliberate intervention in the foreign exchange market by a government or central bank to influence the value of its currency.
The changes in the value of a currency relative to other currencies over time, resulting from market forces and economic factors.
The concept that the exchange rate between two currencies should equal the ratio of their respective purchasing powers.
A decrease in the value of a currency relative to other currencies, resulting in higher prices for imports and increased competitiveness for exports.
An increase in the value of a currency relative to other currencies, resulting in lower prices for imports and decreased competitiveness for exports.
The degree of variation in the value of a currency over time, reflecting uncertainty and risk in the foreign exchange market.
The buying or selling of currencies by a government or central bank to influence the value of its currency in the foreign exchange market.
The extent to which changes in exchange rates are passed through to domestic prices of imported goods and services.
A situation where the value of a currency is not in line with its fundamental economic factors, leading to distortions in trade and investment.
A measure of the value of a currency relative to a basket of other currencies, used to track changes in exchange rates over time.
A sudden and significant depreciation or appreciation of a currency, often leading to financial instability and economic turmoil.
A system designed to stabilize exchange rates between participating currencies, often used as a precursor to adopting a common currency.
The ability of a currency to adjust its value in response to changes in market forces, without government intervention.
A range within which the value of a currency is allowed to fluctuate, with government intervention to maintain the exchange rate within the band.
The practice of taking advantage of price differences in different currency markets to make a profit.
The set of rules and guidelines adopted by a government or central bank to manage the value of its currency in the foreign exchange market.
A situation where the value of a currency remains relatively constant over time, reducing uncertainty and promoting economic stability.
The state where the demand for a currency equals its supply in the foreign exchange market, resulting in a stable exchange rate.
A temporary situation where the value of a currency moves beyond its long-run equilibrium level in response to shocks or market expectations.
The buying or selling of currencies based on expectations of future exchange rate movements, with the aim of making a profit.
The process of moving from one exchange rate regime to another, often involving significant changes in monetary and economic policies.
The strategies and techniques used by individuals and businesses to mitigate the potential adverse effects of exchange rate fluctuations.
Mathematical models and statistical techniques used to predict future exchange rate movements based on historical data and economic indicators.
Economic models that explain the factors influencing the value of a currency in the foreign exchange market, including interest rates, inflation, and economic growth.
Economic theories that establish a relationship between exchange rates and other economic variables, such as interest rates and inflation.
Economic models that analyze the extent to which changes in exchange rates are transmitted to domestic prices of imported goods and services.
Indicators and indices used to assess the extent to which the value of a currency deviates from its equilibrium level, indicating potential misalignment.
Mathematical models and statistical techniques used to measure and predict the volatility of exchange rates, reflecting uncertainty and risk in the foreign exchange market.
The tactics and tools used by governments and central banks to influence the value of their currency in the foreign exchange market, including direct intervention and indirect measures.
The policies and actions taken by governments and central banks to address and resolve exchange rate crises, including capital controls and monetary tightening.
The assessment of the effectiveness and impact of exchange rate policies on macroeconomic variables, such as inflation, economic growth, and trade balance.