国际⾦融复习提纲偶蹄
Outline for Reviewing International Finance (2013)
The Structure of Examination Paper
1. Multiple Choice (30×1, 30 points)
2. Definition of Terms(5×4, 20 points)
3. Short Answer (3×10, 30 points)
4. Calculation (2×10, 20 points)
Outline for Reviewing
Multiple Choice
Cover all Chapters
Definition of Term
Chapter 12: balance of payments accounting, current account balance，official ttlements balance，national saving balance of payments accounting：国际收⽀会计accounting record of all monetary transactions between a country and the rest of the world
Current account balance (exports minus imports)：经常项⽬差额net expenditure by foreigners on domestic goods and rvices. The official ttlements balance ：官⽅结算差额is the negative value of official international rerve asts, and it shows a central bank’s holdings of foreign asts relative to foreign central banks’holdings of domestic asts.
The bookkeeping offt to the balance of official rerve transaction .
National saving = national income (Y) that is not spent on consumption (C) or government purchas (G).
Chapter 13: appreciation, exchange rate, real rate of return, forward exchange rate, spot exchange rate, interest parity condition, vehicle currency
Appreciation is an increa in the value of a currency relative to another currency.
Exchange rate: The price of one currency in terms of another is called an exchange rate.
The real rate of return :The expected rate of return that savers consider in deciding which asts to hold is the expected real rate of return, that is, the rate of return computed by measuring ast values in terms of some broad reprentative of products that savers regularly purcha. forward exchange rates: Foreign exchange deals sometimes specify a value date farther away than two days30 days, 90 days, 180 days, or even veral years. The exchange rates quoted in such trans-actions are called forward exchange rates.
The foreign exchange transactions we have been discussing take place on the spot: two par-ties
agree to an exchange of bank deposits and execute the deal immediately. Exchange rates governing such "on-the-spot" trading are called spot exchange rates, and the deal is called a spot transaction.
Interest parity condition:Interest parity implies that deposits in all currencies are equally desirable asts.
Interest parity implies that arbitrage in the foreign exchange market is not possible.
vehicle currency：周转货币Becau of its pivotal role in so many foreign exchange deals, the dollar is sometimes called a vehicle currency
Chapter 14: aggregate money demand, money supply, exchange rate overshooting, Aggregate money demand：货币总和需求aggregate money demand is the total demand for
拥抱谎言拥抱你money by all houholds and firms in the economy.is just the sum of all the economy’s indiv idual money demands.
Money supply: the total stock of money in the economy; currency held by the public plus money in accounts in banks
Exchange rate overshooting:the exchange rate is said to overshoot when its immediate respon to a disturbance is greater than its long-run respon.
Chapter 15: Fisher effect, law of one price, nominal interest rate, purchasing power parity (PPP), real exchange rate, relative PPP
Fisher effect: describes the relationship between nominal interest rates and inflation.
Law of one price: the low of one price states that in competitive markets free of transportation costs and official barriers to trade(such as tariffs),identical goods sold in different countries must ll for the same price when their prices are expresd in terms of the same currency.
Nominal interest rate：名义利率An interest rate is called nominal if the frequency of compounding (e.g. a month) is not identical to the basic time unit (normally a year). Purchasing power parity(PPP): the theory of purchasing power parity states that the exchange rate between two countries’ currencies equals the ratio of the countries’ price levels.
他的东西一直放在里面一整夜Real exchange rate: the rate of exchange for goods and rvices across countries
Relative PPP: states that the percentage change in the exchange rate between two currencies over any period equals the difference between the percentage changes in national price levels. Chapter 16: AA schedule, inflation bias, aggregate demand, J-curve, DD schedule, pass-through
AA schedule: The schedule of exchange rate and output combinations that are consistent with equilibrium in the domestic money market and the foreign exchange market is called the AA schedule.
inflation bias: Refers to the difference between the mean value and the target value of inflation according to the circulation by the basic model.
DD schedule: The curve shows all combinations of output and the exchange rate for which the output market is in short run equilibrium.
无限潜能
pass-through: The percentage from the exchange rate to import prices by which import prices ri when the home currency depreciates by 1 percent.
Chapter 17: balance of payments crisis, bimetallic standard, capital flight, devaluation,
gold exchange standard, gold standard, imperfect ast substitutability, managed floating exchange rates, perfect ast substitutability, rerve currency, revaluation, risk premium, lf-fulfilling currency cris, sterilized foreign exchange intervention,三国的故事
硬盘分几种balance of payments crisis: When a central bank does not have enough official international rerve asts to maintain a fixed exchange rate, a balance of payments crisis results.
bimetallic standard: the value of currency is bad on both silver and gold.
capital flight:financial capital is quickly moved from domestic asts to foreign asts devaluation: a devaluation occurs when the central bank rais the domestic currency price of foreign currency
gold exchange standard: halfway between the gold standard and a pure rerve currency standard is the gold exchange standard
gold standard: gold acts as official international rerves that all countries u to make official international payments. imperfect ast substitutability: In general, foreign and domestic asts may differ in the amount of risk that they carry: they may be imperfect substitutes.
managed floating exchange rates: system in which governments may attempt to moderate exchange rate movements without keeping exchange rates rigidly fixed .
perfect ast substitutability:t he key feature of our model that leads to the results is the assumption that the foreign exchange market is in equilibrium only when the expected returns on domestic and foreign currency bonds are the same. rerve currency: one currency acts as official international rerves.
Revaluation: a revaluation occurs when the central bank lower the domestic currency price of foreign currency
risk premium: default risk and exchange rate risk
lf-fulfilling currency cris: Expectations of a balance of payments crisis only worn the crisis and hasten devaluation that occur in such circumstances often are called lf-fulfilling currency cris .
sterilized foreign exchange intervention:central banks sometimes carry our equal foreign and domestic ast transactions in opposite directions to nullify the impact of their foreign exchange operations on the domestic money supply . this type of policy is called sterilized foreign exchange intervention
Chapter 18: external balance, internal balance, expenditure-changing policy, price-specie-flow mechanism, expenditure-switching policy
external balance: A country’s current account is neither so deeply in deficit that the country may be unable to repay its foreign debts in the future nor so strongly in surplus that foreigners are put in that position.
Internal balance: The full employment of a country’s resources and domestic price level stability.
expenditure-changing policy: Changing social needs or total expenditure level of the national economy policy, who purpo is to change aggregate demand to change the demand for foreign goods, rvices and financial asts, and achieve the balance of payments adjustment.
price-specie-flow mechanism: Under the internationally common practice of the gold
standard, a country's international balance of payments can keep equilibrium automatically by the fluctuations of commodity price and the output or input of gold.
expenditure-switching policy: The policies which can affect the international competitiveness of commodities and to increa their income relative to spending by changing the spending structure.
Chapter 19:destabilizing speculation
destabilizing speculation：it means that if foreign exchange traders saw that a currency was depreciating, it was argued, they might ll the currency in the expectation of future depreciation regardless of the currency ‘s longer-term prospects; and as more traders jumped on the bandwagon by lling the currency, the expectations of depreciation would be realized. Chapter 20:monetary efficiency gain, economic stability loss, optimum currency areas monetary efficiency gain：the monetary efficiency gain from joining the fixed exchange rate system equals the joiner’s saving from avoiding the uncertainty, confusion, and calculation and transaction costs that ari when exchange rates float. economic stability loss：the extra instability caud by the fixed exchange rate is the economic stability loss
fixed exchange rates are most appropriate for areas cloly integrated through international trade an
d factor movements. Short Answer
Chapter 13
1.The Effect of Changing Interest Rates on the Current Exchange Rate
An increa in the interest paid on deposit of a currency caus that currency to appreciate against foreign currencies.
A ri in dollar interest rates caus the dollar to appreciate against the euro.
A ri in euro interest rates caus the dollar to depreciate against the euro.
2.The Effect of Changing Expectations on the Current Exchange Rate
A ri in the expected future exchange rate caus a ri in the current exchange rate ,similarly ,a fall in the expected future exchange rate caus a fall in the current exchange rate .
Chapter 14
1.the Money Supply and the Exchange Rate in the Short Run
in the short run ,the price level and real output are given .
理解上⾯这个图是什么意思就OK。再分析M变化时Exchange Rate怎么变化。
2.Permanent Money Supply Changes and the Exchange Rate.
中⽂版教材357⾯，英⽂版教材87⾯，看懂并能描绘清楚（a）和（b）两幅图。
Chapter 15外国神话故事
1.The Relationship Between PPP and the Law of One Price
a)The law of one price applies to individual commodities, while PPP applies to
the general price level.
b)If the law of one price holds true for every commodity, PPP must hold
automatically for the same reference baskets across countries.
Proponents of the PPP theory argue that its validity does not require the law of one price to hold exactly。
2.The Fundamental Equation of the Monetary Approach
predicts that levels of average prices across countries adjust so that the quantity of real monetary asts supplied will equal the quantity of real monetary asts demanded:
P US = Ms US/L (R$, Y US)
P EU = Ms EU/L (R€, Y EU)
3 、Explaining the Problems with PPP
The failure of the empirical evidence to support the PPP and the law of one price is related to:为什么叫虢国夫人
1)Trade barriers and nontradables
