Term
| lesser known benefits of free trade |
|
Definition
| producers can benefit from economies of scale, more efficient allocation or resources, source of foreign exchange |
|
|
Term
| World Trade Organization objectives/functions |
|
Definition
| trade negotiations, implementation/monitoring of agreements, dispute settlement, building trade capacity in developing countries, outreach |
|
|
Term
| Voluntary Export Restraints (VERS) |
|
Definition
| Political pressure placed on a country not to export a good |
|
|
Term
| Administrative obstacles as means of protectionism |
|
Definition
| Bureaucracy, voluntary export restraints, environmental standards, import license (payment to government for right to import), health/safety standards |
|
|
Term
| Factors leading to changes in currency demand and supply |
|
Definition
demand for a country’s exports, demand for imports, relative
interest rates, relative inflation
rates, investment from overseas
in a country’s firms (foreign
direct investment and portfolio
investment), speculation |
|
|
Term
fixed exchange rate
(adjustable peg system) |
|
Definition
| intervention by central bank to maintain single rate |
|
|
Term
devaluation of currency
(vs. depreciation) |
|
Definition
devaluation is arranged by central bank to maintain fixed rate
(depreciation is response to less demand for currency) |
|
|
Term
revaluation of currency
(vs. appreciation) |
|
Definition
revaluation = increase in value caused by central bank
(vs. appreciation = response to supply/demand) |
|
|
Term
| maintaining fixed exchange rate |
|
Definition
- creating a standard (gold, other country's currency, etc.)
- Bank buys/sells currency to adjust to short-term fluctuations
- Current account adjustments (tariffs, quotas, subsidies for exports, etc.)
- If subsidize exports: foreign D for exports increases, S of foreign currency increases
- Foreign reserves
- Special Drawing Rights (SDRs) assigned by IMF to each country can be used to equal out balance of payments
- Federal Reserve Board is like central bank for the world
|
|
|
Term
|
Definition
a flexible exchange rate system in which rates are permitted to float, but the central bank intervenes on a regular basis to keep the rate within some agreed upon limits
Control through managed interest rates, tax policies, buying/selling foreign/domestic currency |
|
|
Term
Compare/contrast fixed exchange rate system and floating system
(look at degree of certainty for stakeholders, ease of adjustment, role of international reserves, flexibility offered to policy makers) |
|
Definition
| http://www.investopedia.com/articles/03/020603.asp |
|
|
Term
|
Definition
| land, labour, capital and enterprise. These are the resources necessary to create goods and services in an economy. |
|
|
Term
|
Definition
|
|
Term
|
Definition
| abnormal or super-normal profit or pure profit; profit above opportunity cost rate of return (OCRR) |
|
|
Term
|
Definition
What to produce?
How to produce it?
For whom to produce? |
|
|
