Global Economics

Ch. 11 Foreign Exchange -- Foreign-Exchange Market -- Types of Foreign-Exchange Transactions -- Interbank Trading -- Reading Foreign-Exchange Quotations -- Weak Dollar Is a Bonanza for European Tourists -- Forward and Futures Markets -- Foreign-Currency Options -- Exchange-Rate Determination -- Demand for Foreign Exchange -- Supply of Foreign Exchange -- Equilibrium Rate of Exchange -- Indexes of the Foreign-Exchange Value of the Dollar: Nominal and Real Exchange Rates -- Arbitrage -- The Forward Market -- The Forward Rate -- Relation between the Forward Rate and Spot Rate -- Managing Your Foreign Exchange Risk: Forward Foreign-Exchange Contract -- Case 1 -- Case 2 -- How Markel, Volkswagen, and Nintendo Manage Foreign Exchange Risk -- Does Foreign-Currency Hedging Pay Off? -- Currency Risk and the Hazards of Investing Abroad -- Interest Arbitrage -- Uncovered Interest Arbitrage -- Covered Interest Arbitrage -- Foreign-Exchange Market Speculation -- Foreign Exchange Trading as a Career -- Foreign-Exchange Traders Hired by Commercial Banks, Companies, and Central Banks -- Currency Markets Draw Day Traders -- How to Play the Falling (Rising) Dollar -- Summary -- Key Concepts and Terms -- Study Questions -- Exploring Further.

Ch. 12 Exchange-Rate Determination -- What Determines Exchange Rates? -- Determining Long-Run Exchange Rates -- Relative Price Levels -- Relative Productivity Levels -- Preferences for Domestic or Foreign Goods -- Trade Barriers -- Inflation Rates, Purchasing Power Parity, and Long-Run Exchange Rates -- Law of One Price -- Burgeromics: the "Big Mac" Index and the Law of One Price -- Purchasing Power Parity -- Inflation Differentials and the Exchange Rate -- Determining Short-Run Exchange Rates: The Asset-Market Approach -- Relative Levels of Interest Rates -- Expected Change in the Exchange Rate -- Diversification, Safe Havens, and Investment Flows -- International Comparisons of GDP: Purchasing Power Parity -- Exchange-Rate Overshooting -- Forecasting Foreign-Exchange Rates -- Judgmental Forecasts -- Technical Forecasts -- Fundamental Analysis -- Comercial Mexicana Gets Burned by Speculation -- Summary -- Key Concepts and Terms -- Study Questions -- Exploring Further.

Ch. 13 Mechanisms of International Adjustment -- Price Adjustments -- Gold Standard -- Quantity Theory of Money -- Current-Account Adjustment -- Financial Flows and Interest-Rate Differentials -- Income Adjustments -- Disadvantages of Automatic Adjustment Mechanisms -- Monetary Adjustments -- Summary -- Key Concepts and Terms -- Study Questions -- Exploring Further.