What is meant by pegging of currency? Pegging iscontrolling a country's currency rate by tying it to another country's currency. A country's central bank, at times, will engage in open market operations to stabilize its currency by pegging, or fixing, it to another country's presumably mor...
Despite its unique advantages, fiat currency also carries additional risks over other forms of currency: Inflation and hyperinflation risks One of the primary risks associated with fiat money isinflation. Since fiat money is not backed by a physical commodity, excessive printing of money can lead to...
What is meant by the interest parity condition? What does the condition mean for the foreign exchange market? What are the significances of the balance of trade? What is a negative bilateral trade balance? What do you understand by the term "fiat money"?
What is meant by the checks and balances system? What is meant by the "balance of payments" of a country? What are the components of a balance of payments? What is meant by the term "fertility transition," and what are the economic motives behind this transitio...
If we condense those stages to the basics, the world has gone through three phases: commodity money, gold standard (the final form of commodity money), and fiat currency. A fourth phase, digital money, is on the horizon. This includes private digital assets (e.g. bitcoin and stablecoins)...
Liberty is essential for the full flowering of human intelligence, creativity, and dignity. To be dominated by another is to be denied the chance to think and act for oneself, which is the only way to grow and develop one’s individuality. Domination also stifles innovation and personal respo...
What is a digital exchange platform? Digital exchanges (sometimes called crypto exchanges) are digital platforms that allow users to buy, sell, and trade cryptocurrency (and/ or other digital assets) using fiat currency or other cryptocurrencies. These exchanges provide a user-friendly way for inves...
In a fiat money system, paper money isn't backed by gold or any other precious metal. This is what is meant when it's said that paper money has no intrinsic value. The only value the money has is what the government and the nation's people assign to it. In other words, the value...
Unlike money backed by gold, fiat currency has no intrinsic value. "Now the U.S. dollar can no longer be exchanged for gold and is instead backed by nothing more than a promise," says Elliott. The end of the gold standard gave way to the free market system in place today. Now, the...
USDC (USD Coin) is one of the most popular stablecoins out there. Here are some things you need to know about what it is and how it works.