by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is Appreciating and Depreciating Currency?When the exchange rate for a currency rises, so that the currency exchanges for more of other currencies, we refer to it as appreciating or “strengthening.” Related Topics What Does it Mean to Dollarize Foreign Exchange...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is a Tobin Tax? The Tobin tax is a duty proposed on spot currency trades to penalize short-term currency trading in order to stabilize markets and disincentive speculation. The Tobin tax can be used to generate revenue streams for countries that see a great deal...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is Foreign Direct Investment?We often divide financial investments that cross international boundaries, and require exchanging currency into two categories. Foreign direct investment (FDI) refers to purchasing a firm (at least ten percent) in another country or...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is Dollarize? Most countries have different currencies, but not all. Sometimes small economies use an economically larger neighbor’s currency. For example, Ecuador, El Salvador, and Panama have decided to dollarize—that is, to use the U.S. dollar as their...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is a Free Trade Agreement? Free Trade Agreements are direct agreements between nations that allow for the unrestricted transfer, sale, and distribution of goods and services between the nations. The Free Trade Agreement generally grants special rights to the...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is a Race to the Bottom? The race to the bottom scenario of global environmental degradation runs like this. Profit-seeking multinational companies shift their production from countries with strong environmental standards to countries with weak standards, thus...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is a National Interest Argument? Some argue that a nation should not depend too heavily on other countries for supplies of certain key products, such as oil, or for special materials or technologies that might have national security applications. On closer...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is a Tariff? A tariff is a customs duty or tax levied on imports of merchandise goods. Most of the time a tariff is an ad valorem tariff (percentage of value) or a specific tariff. Less often, it can be a compound tariff made up of both of these elements...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is Financial Capital? Financial capital most commonly refers to assets needed by a company to provide goods or services, as measured in terms of money value. What is Economic Capital? Economic capital is the estimated amount of money needed to cover possible...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is Unilateral Transfer? Recorded when transfers of resources that affect a nation’s income or product in the current period occur without a quid pro quo; the country receiving the transfer neither provides nor promises to provide anything of...
