Exchange rate
the price at which one currency is exchanged for another
Appreciate
in terms of a currency to increase in value relative to other currencies
Depreciate
in terms of currency, to decrease in value relative to other currencies
Devalue
to reduce the value of one currency relative to other currencies
Monetary policy
an important tool of national govts. to influence broad macro-economic conditions such as unemployment, inflation, and economic growth. typically govts. alter their monetary polices by changing national interests rates or exchange rates.
Central bank
the institution that regulates monetary conditions in a country’s economy, typically by raising or lowering interest rates and the quantity of money in circulation.
fixed exchange rate
policy under which a govt. commits itself to keeping its currency at or around a specific value relative to another currency or a commodity, such as gold
gold standard
the monetary system that prevailed between 1870-1914, in which countries tied their currencies to gold at a legally fixed prices
floating exchange rate
policy under which a government permits its currency to be traded on the open market without direct govt. control or intervention. ex US $
Bretton woods monetary system
the monetary order regulated among WW2 allies in 1944, which lasted until 1970’s and which was based on a U.S. dollar tied to gold. Other currencies were fixed to the dollar but were more permitted to adjust their exchange rates.
adjustable peg
a monetary system of fixed but adjustable rates. government are expected to keep their currencies fixed for extended periods but are permitted to adjust the exchange rate from time to time as economic conditions change.
international monetary regime
a formal or informal arrangement started by most countries in the world economy to govern relations among their currencies.
Currency manipulation
involving in currency markets to alter the currency value in order to give producers a competitive advantage in international markets
