Podcast
Questions and Answers
International finance encompasses the financial interactions and transactions that occur across national ______.
International finance encompasses the financial interactions and transactions that occur across national ______.
borders
The foundation of the international financial system is built on a network of global financial ______, institutions, and agreements.
The foundation of the international financial system is built on a network of global financial ______, institutions, and agreements.
markets
International finance refers to the management of monetary relations and financial transactions that cross international ______.
International finance refers to the management of monetary relations and financial transactions that cross international ______.
borders
International Finance is broadly concerned with monetary and macroeconomic interrelations between two or more ______.
International Finance is broadly concerned with monetary and macroeconomic interrelations between two or more ______.
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The social and economic development of any country greatly depends on an efficient financial ______.
The social and economic development of any country greatly depends on an efficient financial ______.
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Developing countries need to lay the social and ______ foundations of the economy.
Developing countries need to lay the social and ______ foundations of the economy.
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The Philippines depends on international ______ institutions to finance major development programs.
The Philippines depends on international ______ institutions to finance major development programs.
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The Philippines' monetary and fiscal policies came from the ______ recommendations.
The Philippines' monetary and fiscal policies came from the ______ recommendations.
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The International Monetary System facilitates currency exchange and international ______.
The International Monetary System facilitates currency exchange and international ______.
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A new international monetary system must be capable of achieving monetary ______.
A new international monetary system must be capable of achieving monetary ______.
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Firms consider financial factors, such as foreign exchange rates, differing interest rates, and foreign ______ rates.
Firms consider financial factors, such as foreign exchange rates, differing interest rates, and foreign ______ rates.
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The net present value principle applies to both foreign and ______ operations.
The net present value principle applies to both foreign and ______ operations.
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The banking system creates money through deposits and the process of savings and ______.
The banking system creates money through deposits and the process of savings and ______.
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One significant complication of international business is foreign ______.
One significant complication of international business is foreign ______.
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The global financial system facilitates the flow of capital, goods, and services across borders, and is governed by various institutions and ______.
The global financial system facilitates the flow of capital, goods, and services across borders, and is governed by various institutions and ______.
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Financial institutions encourage people to save money in banks for interest earnings and ______.
Financial institutions encourage people to save money in banks for interest earnings and ______.
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The ______ standard defines a unit of account based on a specific mass of gold.
The ______ standard defines a unit of account based on a specific mass of gold.
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The basic function of financial institutions includes using the savings of individuals for ______.
The basic function of financial institutions includes using the savings of individuals for ______.
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Investment banks and investment houses sell shares of ______ in a business.
Investment banks and investment houses sell shares of ______ in a business.
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The Philippine economy is primarily an agricultural economy and a ______ economy.
The Philippine economy is primarily an agricultural economy and a ______ economy.
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Flashcards
International Finance
International Finance
The study of financial interactions and transactions between countries, including exchange rates, capital flows, and multinational corporate finance.
Global Financial System
Global Financial System
The system of markets and institutions that manage capital flows and influence both local and global economies.
Exchange Rate
Exchange Rate
The rate at which one currency can be exchanged for another.
Capital Flows
Capital Flows
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International Financial Management
International Financial Management
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Gold Standard
Gold Standard
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Floating Exchange Rate Regime
Floating Exchange Rate Regime
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Net Present Value Principle
Net Present Value Principle
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Foreign Exchange Markets
Foreign Exchange Markets
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Money Creation
Money Creation
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Transferring Money
Transferring Money
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Accumulation of Savings
Accumulation of Savings
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Lending and Investing Money
Lending and Investing Money
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Facilitating Lending & Investing
Facilitating Lending & Investing
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Developing countries' reliance on international funding
Developing countries' reliance on international funding
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Conditions for development loans
Conditions for development loans
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International Monetary System (IMS)
International Monetary System (IMS)
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Objectives of a New International Monetary System
Objectives of a New International Monetary System
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Key Goals of the Current International Monetary System
Key Goals of the Current International Monetary System
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Study Notes
International Finance
- International finance involves financial transactions and interactions across national borders, encompassing various financial instruments, institutions, and markets.
- It plays a crucial role in facilitating investment, trade, and economic growth globally.
- International finance is complex, integrating factors like exchange rates, capital flows, and multinational corporate finance.
- Its foundation is a network of global financial markets, institutions, and agreements facilitating capital and currency exchange.
- The system aims for economic cooperation, stability, and growth in an interconnected world.
Nature and Definition of International Finance
- International finance encompasses the management of monetary relations and financial transactions crossing international borders.
- It includes foreign direct investment and cross-border banking.
- International finance studies the interrelations between countries' monetary and macroeconomic systems.
- It examines international monetary systems, balance of payments, foreign direct investment, and their relation to international trade.
- Efficient financial systems are crucial for social and economic development in any nation.
Relevance of Finance for Economic Development
- A well-developed financial system is essential for large-scale production and specialization in any economy.
- It facilitates payments for goods and services, enabling businesses to access funds for capital goods.
- The financial system supports government programs, and private-sector ventures, driving economic activity.
- It creates an environment where efficient producers and consumers thrive, contributing to the economy's overall health and growth.
International Business Finance
- International business finance focuses on the management of financial resources in a global context, handling complexities and risks of cross-border operations.
- It encompasses capital allocation, risk management, and financial decision-making for multinational corporations (MNCs).
- Factors like foreign exchange rates, differing interest rates, and complex accounting methods relating to foreign operations are key considerations.
- MNC's principles of business finance apply to foreign operations as well, focusing on maximizing shareholder value and minimizing financing costs, but with added complexities.
- International business finance emphasizes managing risks associated with currencies and global economic conditions in addition to the domestic considerations.
International Financial System
- The Global Financial System is a framework of legal agreements, institutions, and actors facilitating international financial flows for investment and trade.
- It's a complex network encompassing multinational corporations, financial markets, and international organizations like the IMF.
- The gold standard, utilizing circulating coins or bullion, was a previous framework for defining currency values.
- The Bretton Woods system established institutions like the IMF and World Bank for international monetary cooperation.
Functions of Financial Institutions
- Financial institutions create money through savings and lending activities, creating a multiplier effect on the financial system.
- They facilitate money transfers, enabling financial transactions across borders.
- Savings accumulation, lending, and investment are core functions of financial institutions, helping businesses and individuals participate in the global economy.
- Acting as intermediaries, financial institutions develop markets and investment instruments to support global economic transactions.
- Financial institutions support diverse economic activities, especially in developing nations that require capital for development.
International Monetary System
- The International Monetary System is a system defining monetary and financial relationships between countries, evolving from earlier ones.
- The system facilitates international payments and capital movement.
- The Bretton Woods system led to current floating exchange rates, impacting international trade and MNC operations during fluctuations.
- Objectives of a new international monetary system focus on achieving monetary stability, restoring employment levels, and managing inflation.
Money
- Money is anything generally accepted for goods and services and debt repayment.
- Money functions as a medium of exchange, unit of account, store of value, and standard of deferred payment.
Monetary Policy
- Monetary policy involves actions by central banks to manage the money supply and overall economic conditions.
- Expansionary monetary policies decrease interest rates and reserves, boosting economic activity, but possibly increasing inflation.
- Contractionary policies increase interest rates and reserves, lowering inflation, but potentially slowing economic growth.
- Central banks use monetary policy tools to achieve macroeconomic stability and manage inflation.
Balance of Payments
- Countries' economic relations with the rest of the world are recorded by the Balance of Payments (BOP).
- BOP involves trade in goods and services, financial transactions, and transfers, providing an overview of a country's international economic position.
- Surplus and deficit balances signify inflow and outflow of foreign exchange, respectively, affecting exchange rates and monetary policies in different countries.
- Surplus and deficit balances, while important factors, are influenced by various underlying economic conditions.
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Description
This quiz provides an overview of international finance, covering key concepts such as financial transactions across borders, foreign direct investment, and the role of global financial markets. Gain insights into how international finance facilitates investment, trade, and economic growth, and understand the complexities of exchange rates and capital flows.
