International Finance

What are International Finances?

• the trade of goods, services, technology, capital and/or knowledge across national borders

• Societies and countries have differing levels of "development" on an international scale.

• The study of monetary interactions between two or more countries.

International Finance Analyzes the following areas of study:

• Optimum currency area theory

• Mudell-Flemig Model

• Interest Rate Parity

• All of the Above

What is Purchasing Power Parity?

• Is an economic theory that allows the comparison of the purchasing power of various world currencies

• Difference between all money flowing into the country in a particular period of time

• Societies and countries have differing levels of "development" on an international scale.

• None of them

The Nomial Exchange Rate is the relative price of currencies of two countries.

• False

• True

What is the classical gold standart?

• Doesn´t say

• An increase of prices over the time

• The possibility o an unprecedented event occur that affects asset prices

• Was a system in which nearly all countries fixed the value of their currencies in terms of a specified amount of gold

Bretton Woods System states that Each country fixed the value of its currency in terms of gold or dollar and kept its price within a range of 1% of its parity value

• True

• False

What is a reserve currency?

• An unpredictable event may occur which affects the asset prices

• A large quantity currency maintained by major financial institutions to prepare for investments to influence their domestic exchange rate

• System created a collective international currency exchange regime

• A supply of a commodity not needed for immediate use but available if required.

Which are the sides of the crisis?

• Banking Crisis

• Capital and Trade Imbalance

• Fiscal Crisis

• All of the above

The dark matter hypothesis is asking to revisit the question what is actually the true net asset position of a country.

• False

• True

What are the Trade Imbalances?

• A rise of prices over a certain period of time

• Societies and countries have differing levels of "development" on an international scale.

• Difference between the monetary value of a nation´s exports and imports over a certain time period

• I don´t know