Class notes
International Economics Course 6
- Course
- Institution
Aantekeningen van Internationale Economie gegeven door Tahmasebi aan de Fontys Hogeschool Marketing Management te Eindhoven locatie Rachelsmolen.
[Show more]
Seller
Followjurnesleddens
Reviews received
Content preview
International EconomicsCourse 6 2-10-2018 Jurne Sleddens
Exercise 1
You except 1 million USD in 3 months you decide to buy a 3 M FWD contract.
[Premium discount basic points] > * Spot: USD/EUR 0.8531
1M FWD USD/EUR= -2.5600
3M FWD USD/EUR = -3.4800
In 3 months from now, USD/EUR = 0.8000
Will you regret? Yes, because you get more dollars when the USD/EUR rate is 0.8000 then when the
USD/EUR is 0.8527 (= 0.8531- 3.4800 basic points).
Exercise 2
The European Central Bank wants to increase money supply. Name 3 concrete measures, printing
money does not count.
o Open market operations
Buy some bonds from the public.
o Required Reserve Ratio (RRR)
o Discount rate instrument
Decrease the discount rate.
International trade
When a country exports more than it imports it’s called a trade surplus.
But when imports are bigger than exports it’s called a trade deficit.
What influences import/export aka trade surplus/deficit.
Domestic savings are higher than the higher investments in that economy typically we see a
trade surplus. When we see domestic savings are smaller than domestic investments typically
we see a trade deficit. This is due central banks in the country doesn’t have enough domestic
savings so they can’t loan it to organizations which want to loan it. So US banks for example
lack fonds, fonds come from abroad, so demand for US goes up which makes the US stronger
which is good for importing which means trade deficit.
Protectionism
Importquota
o You can import a product for a maximum of x in the total EU for example.
Tariffs
o Raise the price of a product which affects the price of a product which affects the
demand. No quota on the maximum import.
Non-tariff barrier
o Barriers that doesn’t influence money like for example quality standards
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller jurnesleddens. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $4.28. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
67474 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now