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14 Cards in this Set
- Front
- Back
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International Monetary System |
Institutional agreement adopted by countries to govern exchange rates. |
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Floating Exchange Rate |
An exchange rate where converting currency into another is continuously adjusted depending on supply and demand. |
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Pegged Exchange Rate |
Currency value is relative to a reference currency |
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Dirty Float System |
System under which a countries currency is allowed to float freely against other currencies. |
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Fixed Exchange Rate |
A system under which the exchange rate for converting one currency into another is fixed. |
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European Monetary System (EMS) |
EU system designed to create a zone of monetary stability in Europe, control inflation and coordinate exchange rate policies of EU Countries. |
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Gold Standard |
The practice of pegging currencies to gold and guaranteeing convertibility |
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Gold Par Value |
The amount of currency needed to purchase one ounce of gold. |
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Balance of Trade Equilibrium |
Reached when the income a nations residents earn from exports equals money paid for imports |
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Managed Float System |
System under which some currencies are allowed to float freely, but the majority are either managed by government intervention or pegged to another currency. |
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Currency Board |
Means of controlling a countries currency. Maintaining a fixed exchange rate with a foreign currency. |
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Banking Crisis |
A loss of confidence in the banking system, withdrawing of deposits. |
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International Monetary Fund (IMF) |
Maintains order in the international monetary system |
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Moral Hazard |
Arises when people behave recklessly because they know they will be saved if things go wrong. Regarding banks and IMG |
