world of economics 82 views

Mercantilism

Introduction Mercantilism is economic nationalism for the purpose of building a wealthy and powerful state. Adam Smith coined the term “mercantile system” to describe the system of political economy that sought to enrich the country by restraining imports and encouraging exports. This system dominated Western European economic thought and policies from the sixteenth to the late eighteenth…

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world of economics 61 views

The Offer Curve

Origin and Definition of Offer Curve Offer curves (sometimes referred to as reciprocal demand curves) were devised and introduced into international economics by Alfred Marshall and Ysidro Edgeworth, two British economists, at the turn of the twentieth century. Since then, offer curves have been used extensively in international economics, especially for pedagogical purposes. The offer…

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world of economics 94 views

Spot & forward rates

The most common type of foreign exchange transaction involves the payment and receipt of the foreign exchange within two business days after the day the transaction is agreed upon. The two-day period gives adequate time for the parties to send instructions to debit and credit the appropriate bank accounts at home and abroad. This type…

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world of economics 75 views

Arbitrage

Arbitrage is the process of simultaneous buying and selling of an asset from different platforms, exchanges or locations to cash in on the price difference (usually small in percentage terms). While getting into an arbitrage trade, the quantity of the underlying asset bought and sold should be the same. Only the price difference is captured…

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