Module 4 Vocabulary Flashcards
Economic agreement between countries to allow free trade between members
Free Trade Agreement
The policy or practice of acquiring full or partial political control over another country to exploit it economically
Colonialism
An investment in another country is purely financial and does not involve any management responsibility
Portfolio investment
The process of allocating capital in a way that reduces the exposure to any one particular asset or risk
Diversifying
The return of earnings from foreign subsidiaries to their parent companies back in the home country
Dividend repatriation
The total dollar value of a company’s outstanding shares of stock
Market capitalization
A tariff that is lower for some nations than others
Preferential tariff
An area where the nations allow free, or almost free, trade among each other while imposing tariffs on goods of nations outside the zone
Trade-free zone
Which agreement was established in 1988 and now has both political and economic goals to keep peace and stimulates economic growth in South American countries?
MERCOSUR
USMCA
NAFTA
CAFTA-DR
MERCOSUR
Correct! This is also named the Common Market of the South, or Mercado Común del Sur, and fits the agreement described.
The market in which people use one currency to buy another currency
Foreign exchange market
The way in which an authority manages its currency in relation to other currencies and the foreign exchange market
Exchange rate regime
A system where the value of currency in relation to others is allowed to freely fluctuate subject to market forces
Floating exchange rate
A system where a currency’s value is tied to the value of another single currency, to a basket of other currencies, or to another measure of value, such as gold
Fixed exchange rate system
A currency system that fixes an exchange rate around a certain value, but still allows fluctuations, usually within certain values, to occur
Pegged exchange rate
