Import Substitution:
Governments sometimes use protective tariffs or quotas to force businesses and consumers to substitute imports with locally produced goods and services. This policy of import substitution is often implemented in developing countries in an effort to save precious foreign currency reserves and promote economic development.
R.C. Epping, A Beginner's Guide to the World Economy, 3rd ed., New York, 2001.
Industrial Policy:
Governmental economic policy that is designed to direct investment in and development of a nation's businesses and industry.
Inflation:
The pervasive and sustained rise in the aggregate level of prices measured by an index of the cost of various goods and services. Repetitive price increases erode the purchasing power of money and other financial assets with fixed values, creating serious economic distortions and uncertainty. Inflation results when actual economic pressures and anticipation of future developments cause the demand for goods and services to exceed the supply available at existing prices or when available output is restricted by faltering productivity and marketplace constraints. Sustained price increases were historically directly linked to wars, poor harvests, political upheavals, or other unique events.
Microsoft® Encarta® Encyclopedia 2001. © 1993-2000 Microsoft Corporation. All rights reserved.
Institutional Investor:
A financial institution such as an insurance company or pension fund that invests in securities.
International Monetary Fund (IMF):
An international economic organization whose purpose is to promote international monetary cooperation and facilitate the expansion of international trade. The IMF operates as a United Nations specialized agency and is a permanent forum for consideration of issues of international payments, in which member nations are encouraged to maintain an orderly pattern of exchange rates and to avoid restrictive exchange practices. The IMF was established, along with the International Bank for Reconstruction and Development (the World Bank), at the UN Monetary and Financial Conference held in 1944 at Bretton Woods, New Hampshire. The IMF began operations in 1947.
Microsoft® Encarta® Encyclopedia 2001. © 1993-2000 Microsoft Corporation. All rights reserved.