eekkk help with eco slang (1 Viewer)

[want2beSMART]

the government could "dirty" the float to raise the exchange rate by...

"dirty"? what is this suppose to mean?

 

[Mandy101]

'dirty' means covert intervention. Covert intervention means that they are intervening in the market without anyone knowing, affecting demand and supply forces.

 

[want2beSMART]

err and what does covert intervention mean?

 

[Mandy101]

^I edited my previous answer with an explanation

 

[want2beSMART]

and what would this covert intervention involve?

 

[Mandy101]

so for example, the reserve bank buys Australian dollars - that would decrease supply/increase demand which would lead to an appreciation of the dollar. they don't tell the public they are doing it though, so it is covert intervention.

 

[want2beSMART]

ohhhh i see

is there a proper economic jargon for "dirty" that would also fit into the sentence of the initial post?

 

[modelzsuck]

Yeah I had a bit of trouble with dirtying the float but its easy to understand once explained right.

 

[nick1048]

it's called the RBA dirtying the float. The term dirtying is used because it interupts the free flow of pure market forces (i.e. supply and demand). If you interfere with something pure u tain or dirty it, hence why it's actually the correct terminology.

There is no direct substitute but you could use

"The government can intervene in order to stablise the exchange rate"

OR

"The government can introduce microeconomic reform in order to stablise the exchange rate"


personally I would use dirty the float, as it is widely accepted and understood amongst economists.

 

[want2beSMART]

it's called the RBA dirtying the float. The term dirtying is used because it interupts the free flow of pure market forces (i.e. supply and demand). If you interfere with something pure u tain or dirty it, hence why it's actually the correct terminology.

so "dirty" is correct economic jargon?

and i thought economic jargon was a brain killer

-edited- sorry didnt see your edit

 

[nick1048]

no economic jargon merely means terms independant to the economic course. For example you won't really find "microeconomic reform" in other subjects, therefore it can be considered economic jargon. Much like Covalent Bonding is Chemistry jargon.

Jargon just means terms that are used to explain specific concepts of a certain course. I really hope you understand what I mean, I can explain further if you'd like?

 

[want2beSMART]

...eerrrmmm no thanks

 

[Mandy101]

Nick is right, you do say that the float is 'dirty', however if you got a question that asked you to explain what that meant, you would discuss covert intervention. And yeah, jargon is a collection of terms relevant and used specifically in a certain area.

 

[want2beSMART]

alrightey cool thanks a lot!!

 

[nick1048]

no problems