Chapter 9
the Foreign Corrupt Practices Act
made it illegal for a firm to offer bribes to foreign parties for the purpose of securing or retaining business including foreign firms while in the U.S. and firms with securities listed in the U.S.
legal systems
provide a framework of rules and norms of conduct that mandate, limit, or
Trade Surplus
A condition in which a nation's exports exceed its imports for a specific period of time.
Trade deficit
A condition in which a nation's imports exceed its exports for a specific period of time.
Special Drawing Right (SDR)
A unit of account of a reserve asset, a type of currency central bans use to supplement their existing reserves in transactions with the IMF>
Bank for International Settlement
Bank for International Settlement The ____ is responsible to ensure that central banks maintain reserve assets and capital/asset ratios above prescribed international minimums so as to avoid over indebtedness.
Devaluation
Government action to reduce the official value of its currency relative to other currencies.
International monetary system
Institutional framework, rules, and procedures by which national currencies are exchanged for one another.
Currency Risk
Potential harm that arises from changes in the price of one currency relative to another.
The General Agreement on Tariffs and Trade (GATT)
The most important development of the last century for reducing trade barriers was
Exchange Rate
The price of one currency expressed in terms of another; the number of units of one currency that can be exchanged for another.
Capital Flight
The rapid sell-off by residents or foreigners of their holdings in a nation's currency or other assets, usually in response to a domestic crisis that causes investors to lose confidence in the country's economy.
Customs Union
When member states harmonize their external trade policies and adopt common tariff and nontariff barriers on imports from nonmember countries they create a
Microfinance
refers to providing small-scale financial services to facilitate entrepreneurship in emerging markets
Foreign Exchange
All forms of money that are traded internationally, including foreign currencies, bank deposits, checks, and electronic transfers.
International Monetary Fund (IMF)
An international agency that aims to stabilize currencies by monitoring the foreign exchange systems of member countries and lending money to developing economies.
World Bank
An international agency that provides loans and technical assistance to low-and middle-income countries with the goal of reducing poverty.
Dirty float
At times countries try to hold the value of their currency within some range; market forces determine the currency value, but the central bank intervenes occasionally in the foreign exchange market to maintain the value of its currency within acceptable limits relative to a major reference currency. This is called a
foreign currency reserves
For a government to intervene in currency markets and increase the value of its own currency the country needs to have
Subsidies
The European and U.S. governments provide supplemental income to farmers and help manage the supply of agricultural commodities under a system called
Balance of payments
The annual accounting of all economic transactions of a nation with all other nations.
Monetary Intervention
The buying and selling of currencies by a central bank to maintain the exchange rate of a country's currency at some acceptable level.
Global financial system
The collective of financial institutions that facilitate and regulate investment and capital flows worldwide, such as central banks, commercial banks, and national stock exchanges.
Foreign exchange market
The global marketplace for buying and selling national currencies.
Central Bank
The monetary authority in each nation that regulates the money supply and credit, issues currency, and manages the exchange rate of the nation's currency.
Harmonized Code
The standardized worldwide system that determines tariff amount according to product classification is called the
free-flow of information in the mass media
Totalitarian states could be characterized by all of the following Except: