FinForces - Financial Forces Learning Objectives...

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1 Financial Forces Understanding the concept of money Learning Objectives Understanding exchange rates, cross rates, Understanding the “how” and “why” of currency exchange controls Understanding how currency is a commodity Understanding the plural impacts of inflation Understanding how financial forces impact international commerce 1. An abstract unit of account by which the value of goods services, and obligations can be measured (sales). 2. Anything that is generally accepted as a means of payment by custom, law (legal tender), or necessity (barter). a. M1, M2, etc. b. Currency (cash) c. Oxen (Greece: the Homeric gold talent =1 ox in value a. Specie (coinage) b. c. Fiat (inconvertible currency) d. Precious metal (intrinsic value) e. Stones, shells, ivory, tobacco, furs (intrinsic value) f. Wampum beads, dried fish, cigarettes (value added) Symbolic value ( bull standard ?) A measure of value and a medium of exchange A commodity: As a “floating currency” P = ƒ(supply, demand) Still in high demand as a: • central reserve asset • vehicle currency • intervention currency • safe haven currency
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2 Money Markets Exchange Rate =P foreign currency expressed in domestic currency
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This note was uploaded on 11/10/2011 for the course MGMT 3600 taught by Professor Robertdesman during the Fall '11 term at Kennesaw.

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FinForces - Financial Forces Learning Objectives...

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