Miscellaneous Quiz / ECON340 midterm 3

Random Miscellaneous or Definition Quiz
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definitionvocab term
financial incentive to witholdinfo, take on excessive risk, or behave in a manner that generates significant social costs
purchase of physical assets by a foreign company or indiv. can be outward or inward.
failure on the part of the banking system that prevents savings from being channeled into investment
notion that interest rate differential btwn 2 countries is approx. the % difference btwn forward and spot exchange rates
assets held by governorsfor use in settling int'l debts. consist primarily of key foreign currencies
national controls on the inflow and/or outflow of funds
requirements placed on the usage or distribution of money lent to another country. esp aid money
set of recommended 'best practices' designed to help countries avoid banking and financial crises. accords emphasize capital requirements, supervisory review, and info disclosure
exchange rate in a forward market, where buyers and sellers agree on a quantity and price for an exchange taking palce 30, 60, 90 days after contract is signed.
decrease in a currency's value under a floating exchange rate system
price of a unit of foreign exchange
inflation-adjusted nominal rate. useful for examining changes int he realtive purchasing power of foreign currencies over time.
debt that is owed to agents outside a country's national boundaries
place where nations can borrow after all sources of commercial lending have dried up. today: IMF fills role
role of banks and institutions that concentrate savings from many sources and lend the money to investors
A deliberate downward adjustment to a country's official exchange rate relative to other currencies.
definitionvocab term
common feature of int'l financial crises; occurs when banks fail and disintermediation spreads
principal repayment and interest payments that are made in order to pay off a debt
spread of a crisis from one country to another through trade flows, currency and exchange rate movements, or changed perceptions of foreign investors
exchange rate that is fixed and unchanging, relative to some other currency or group of currencies
exchange rate system emerged after WWII from the Bretton Woods Conference
requirements that owners of financial institutions invest a percentage of their own capital so that all losses are personal losses to shareholders and other bank owners, as well as
when supply and demand determine the value of a nation's money
involves a banking or exchange rate crisis. results in disintermediation and a slowdown of economic activity
part of BoP that tracks capital flows between a naitonal economy and rest of world
value of all foreign assets owned by a nation's residents businesses and govt, minus value of all domestic assets owned by foreigners
collapse of a nation's currency
purchase of financial assets: stocks bonds bank
record of transactions in goods, services, investment income and unilateral transfers between residents of a country and the rest of the world
increase in a currency's value under a floating exchange rate system
occurs when an individual or firm holds assets denominated in a foreign currency. risk is potential for unexpected losses or gains due to fluctuations in currency values
increase in value of a currency under a fixed exchange rate system
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