Exam 10: The Globalization of International Finance

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The study of the relationship between geography and the economic conditions and behavior of states that define their levels of production, trade, and consumption of goods and services is the field of _____.

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In what ways can private investors affect a currency's value? In what ways can a government's central bank affect the value of the state's currency? How are the role and the interests of the government different from that of a private investor?

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Arbitrage is the selling of one currency (or product) and purchase of another to make a profit on changing exchange rates. Profits are made by changes in the exchange rat, which is the rate at which one state's currency is exchanged for another state's currency in the global marketplace.

What are some of the positive and negative consequences to globalization?  Why would autocratic regimes tend to refuse to integrate into the global economy more so than democratic regimes?  Explain your answer.

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Globalization is the integration of states through increasing contact, communication, and trade, as well as increased global awareness of such integration.  There will always be winners and losers in any changing economy.

To combat the instability of floating exchange rates, some regions are looking to pool sovereignty and create a common currency regulated by a regional central bank.

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The lessons learned from the global economic collapse of the 1930s included

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The _____ and the _____ were created to bolster financial and monetary relations under the Bretton Woods system.

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The British economist who played a crucial role at the Bretton Woods conference was _____ .

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The first phase of the 2008 global financial crisis is displacement, which refers to a change in the system that alters and creates profit opportunities for financial gain.

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Unlike private investors, governments are not allowed to intervene in the currency market to affect the value of their own currency.

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When the United States government backed up the dollar with gold, it was known as arbitrage.

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Geo-economics is the relationship between geography and the economic conditions and behavior of states that define their levels of production, trade, and consumption of goods and services.

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Because of competing values, goals, and priorities, nation-states are limited in their ability to control monetary outcomes.

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The Bretton Woods system was based on what system of exchange rates?

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A government can control the value of its currency by

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Austerity measures are often enacted in countries that suffer from large balance of payments deficits.  Which of the following is NOT a negative consequence of austerity measures?

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_____ is an economic theory advocating free markets and the removal of barriers to the flow of trade and capital as a path to prosperity.

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Monetary policy affects two main economic variables: the supply of money in circulation and interest rates.

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The primary achievable goal of every state in the global economy is to ensure that inflation and unemployment both remain low.

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The financial procedure that is used to calculate the values of currencies and credits when capital is transferred across borders through trade, investment, foreign aid, and loans is called _____.

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A floating exchange rate means that

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