UNT PSCI 3810 - Chapter 9 Vocabulary (2 pages)

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Chapter 9 Vocabulary



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Chapter 9 Vocabulary

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School:
University of North Texas
Course:
Psci 3810 - Intern Relations
Intern Relations Documents
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Chapter 9 Vocabulary Global Finance Business 1 Gold standard a system in international 2 Exchange rate the rate at which one state s currency can be exchanged for the currency of another state since 1973 the international monetary system has depended mainly on floating rather than fixed charges 3 Convertible currency the guarantee that the holder of a particular currency can exchange it for another currency some states currencies are nonconvertible 4 Hyperinflation an extremely rapid uncontrolled rise in prices such as occurred in Germany in the 1920s some third world countries more recently 5 Hard currency money that can be readily converted to leading world currencies 6 Reserves hard currency stockpiles kept by states 7 Fixed exchange rates the official rates of exchange for currencies set by governments not a dominant mechanism in the international monetary system since 1973 8 Floating exchange rates the rates determined by global currency markets in which private investors governments alike buy sell currencies 9 Managed float a system of occasional multination government interventions in currency markets to manage otherwise free floating currency rates 10 Devaluation a unilateral move to reduce the value of a currency by changing a fixed or official exchange rate 11 Central bank an institution common in industrialized countries whose major tasks are to maintain the value of the state s currency to control inflation 12 Discount rate the interest rate charged by governments when they lend money to private banks the discount rate is set by countries central banks 13 Bretton Woods system a post WWII arrangement for managing the world economy established at a meeting in Bretton Woods New Hampshire in 1944 its main institutional components are the World Bank the International Monetary Fund IMF 14 World Bank formally the International Bank for Reconstruction Development IBRD an organization that was established in 1944 as a source of loans to help reconstruct the European economies later the main borrowers were third world countries in the 1990s Eastern European ones 15 International Monetary Fund IMF an IGO that coordinates international currency exchange the balance of international payments national accounts along with the World Bank it is a pillar of the international financial system 16 Special Drawing Right SDR a world currency created by the IMF to replace gold as a world standard valued by a basket of national currencies the SDR has been called paper gold 17 Balance of payments a summary of all the flows of money into out of a country includes three types of international transactions the current account including the merchandise trade balance flows of capital changes in reserves 18 Keynesian economics the principles articulated by British economist John Maynard Keynes used successfully in the Great Depression of the 1930s including the view that governments should sometimes use deficit spending to stimulate economic growth 19 Fiscal policy a government s decisions about spending taxation one of the two major tools of macroeconomic policy making the other being monetary policy 20 Monetary policy a government s decisions about printing circulating money one of the two major tools of macroeconomic policy making the other being fiscal policy 21 National debt the amount a government owes in debt as a result of deficit spending 22 Multinational corporations MNCs a company based in one state with affiliated branches or subsidiaries operating in other states 23 Foreign direct investment the acquisition by residents of one country of control over a new or existing business in another country 24 Host country a state in which a foreign multinational corporation MNC operates 25 Home country the state where a multinational corporation MNC has its headquarters


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