Chapter 10 definitions Flashcards
(19 cards)
economic globalization?
increasing economic interdependence of national economies across the world through a rapid increase in cross-border movement of goods, service, technology, and capital
Bretton woods agreement?
an agreement made after World War 2 in Bretton Woods, New Hampshire, by 44 countries to establish a set of rules, institutions and procedures for the postwar global economy
International monetary system?
global network of institutions established by the Bretton Woods Agreement to promote international trade and the regulation of currency
exchange rate?
the price at which one national currency can be purchased for another
fixed exchange rate?
the value of a country’s currency as set by its government
Gold standard?
a provision of the Bretton Woods Agreement that all printed money, such as a paper dollar, would be convertible to gold and could be cashed in at any time for gold
inflation?
the amount of currency in circulation increases, yet each unit of currency buys less
Floating exchange rate?
currency rates not fixed by government but instead find their own value on the foreign exchange market
quota?
proportional shares, such as those paid by member countries of the IMF
centrally planned system
a system under which government planners decide what goods to produce and how many
free market economy
a system in which government does not intervene (or intervenes only minimally) in the
production and control of goods and services
international money markets
markets in which funds lent for a short time to businesses or governments are bought and sold (short term bonds or certificates of deposit)
mutual fund
a company that combines its clients’ money and invests it in a collection of stocks, bonds and other securities
recession
a period of reduced economic activity lasting longer than two business quarters (six months)
totalitarian
a political system under which individuals are totally subordinate to the decisions of the state
General Agreement on Tariffs and Trade
an international agreement between 1947 and 1995 that aimed to reduce trade barriers among member countries
Free Trade Agreement
1989 economic treaty between Canada and the United States that sought to promote trade by reducing tariffs and other barriers between the two countries
North American Free Trade Agreement
1994 treaty between Canada, the United States and Mexico to improve trade by removing tariffs and other economic barriers
International Monetary FUND
international agency that works with the World Bank to bring stability to international monetary affairs and help expand world trade
