Peng_Chapter 7

Peng_Chapter 7 - PPPandBigMacIndex mustbethesame...

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PPP and Big-Mac Index Purchasing Power Parity  the price for  identical products sold in different countries  must be the same. 
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Exchange Rate Policies floating  (or  flexible exchange rate policy  -  willingness  of a government to let the demand and supply conditions determine  exchange rates clean  (or  free float dirty  (or  managed float target exchange rates  or  crawling bands  -
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Exchange Rate Policies fixed exchange rate policy -  Fixing the exchange rate of  a currency relative to other currencies Peg Currency Board
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Investor Psychology Bandwagon effect  -  result of investors moving as a herd in  the same direction at the same time Capital flight  -  phenomenon in which a large number of  individuals and companies exchange domestic currencies for a  foreign currency
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EVOLUTION OF THE INTERNATIONAL MONETARY SYSTEM Gold standard  - 
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This note was uploaded on 02/21/2010 for the course IBUS 311 taught by Professor Chen during the Fall '08 term at Binghamton.

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Peng_Chapter 7 - PPPandBigMacIndex mustbethesame...

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