unit 4 macro

Foreign Exchange Rate

The going rate such that one currency can be exchanged for another

Brexit

Swift movement of the pound

Dollarizing your economy is dangerous because

you lose all control over monetary policy

When \nations default they

have to peg their currency to another central bank

Foreign Direct Investment

Purchasing a firm (at least 10 percent) in another country or starting up a new enterprise in a foreign country

Portfolio investments

Financial Investments made internationally

Why are Portfolio investments made

Because other economies are outperforming your own

Hedging

Indivuals sign and pay for contracts that will guarantee a foreign exchange rate at a time in the feature. This is done to minimize risk

Speculators

People Who are trying to make money in the market EX. making money off hedging

Arbitrage

Buying/ sellibn