Unit 26 - Exchange Rates Flashcards
the money that is used in a particular country at a particular time
currency
the forces that decide price levels in an economy or trading system whose activities are not influenced or limited by government
market forces
the act of buying something hoping that its value will increase and then selling at this higher price in order to make a profit
speculation
a currency whose value is controlled so that It stays at a particular level in relation to another
pegged currency
to decrease the value of a currency in an otherwise fixed system
to devalue
A Part Of The United Nations which encourages international trade and gives financial help to poor countries
International Monetary Fund (IMF)
the rate at which one currency can be exchanged for gold
gold convertibility
one of the twelve regional banks in the US that are part of the country’s central banking system and are responsible for making sure other banks in their area follow the rules of the Federal Reserve System. They are also responsible for making financial decisions relating to the US economy
Federal Reserve Bank (FED)
an exchange rate that is allowed to change in relation to the value of other currencies
floating exchange rate
a measure of how much one unit of a currency would buy in different countries, calculated by comparing the price of one or more particular products in each country. It is used to judge if currency exchange rates are correct in relation to what can be bought with different currencies:
purchasing power parity (PPP)
to fall in value in a market system
to depreciate
to rise in value in a market system
to appreciate
the attempt to protect oneself against future price changes
to hedge
agreements to buy something at a fixed price several months ahead
futures contract
the amounts of money in foreign currencies that a country has at a particular time
currency reserves
