Chapter 15 Flashcards
What is the exchange rate
The external price of a currency usually measured against another currency
What is a freely floating exchange rate
The exchange rate is determined solely by the interplay of demand for, and supply of, the currency.
What is a fixed exchange rate
An exchange rate fixed at a certain level by the country’s central bank and maintained by the central bank’s intervention in the foreign exchange rate
What is a currency Union
An agreement between a group of countries to share a common currency, and usually to have a single monetary and foreign exchange rate policy
What are indicators of development
These include gross domestic product t per head, information on the distribution of income, mortality rates and health statistics
What is the HDI
An index base on life expectancy, education and per capita income indicators which ranks the words countries into four tiers of humans development Very high Hd High Hd Medium and Low Hd
What is education and training
Education develops individual knowledge and intellect while training develops work skills. Both are necessary for economic growth and development
What is corruption
A barrier holding back economic growth and development especially in less developed economies
What are institutional factors
Examples include rules, laws, constitutions, the financial system and defined property rights
What is infrastructure
For the most part the result of the part investment in buildings, roads, bridges, power supplies, fast broadband and other fixed capital goods that are needed for the economy to operate efficiently
What is human capital
The skills, knowledge and experience possessed by the population.
What is aid
Money, goods and services and ‘soft’ loans given by the government of one country or a multilateral institution such as the world bank to help another country. Non- government organisations such as Oxfam also provide aid.
