Unit 5, Lesson 13 Currency Exchange

Slides:

Advertisements

Similar presentations

The Fed and The Interest Rates

Advertisements

Session 8 Exchange Rates Disclaimer: The views expressed are those of the presenters and do not necessarily reflect those of the Federal Reserve Bank of.

Copyright 2006 – Biz/ed International Economics Trade, The Balance of Payments and Exchange Rates.

Foreign Exchange and Currencies Economics 71a Spring 2007 Mayo, Chapter 6 (skim) Lecture notes 2.6.

EXCHANGE RATES.

Chapter Fourteen Economic Interdependence. Copyright © Houghton Mifflin Company. All rights reserved.14 | 2 Countries are not independent of one another;

Economic Goal 4: External Stability Exchange Rate.

CHAPTER ONE INTERNATIONAL TRADE AND THE BALANCE OF PAYMENTS Trade is simply a buying and selling of goods and services from one to other. International.

International Business 9e

Chapter 7 The Foreign Exchange Market. Outlines… Introduction, The Structure Of Foreign Exchange Market, Functions of foreign exchange markets Spot Market.

Foreign Exchange Rates Flexible Exchange Rates Uses demand and supply to determine the value of one nation’s currency compared to another nation’s Equilibrium.

Part 1 – The current economic environment INDONESIA’S CURRENT ACCOUNT CHALLENGE Richard Dutu Economist, Indonesia Desk OECD Economic Department.

Chapter 20Copyright ©2010 by South-Western, a division of Cengage Learning. All rights reserved 1 ECON Designed by Amy McGuire, B-books, Ltd. McEachern.

Exchange Rate To be able to identify weak and strong currencies To understand the impact of a currencies strength on its balance of trade.

Unit 5, Lesson 13 Currency Exchange AOF Business Economics Copyright © 2008–2011 National Academy Foundation. All rights reserved.

International Economics Trade, The Balance of Payments and Exchange Rates.

‘Strong’ vs. ‘Weak’ Currency Exchange Rates: The price at which currency can be bought and sold.

International Economics Trade, The Balance of Payments and Exchange Rates.

Unit 5, Lesson 12 The Circular Flow Model

Determination of exchange rates By Mr. Benz & Mr. Win.

Chapter 12 International Linkages Introduction National economies are becoming more closely interrelated Economic influences from abroad have effects.

LET’S MAKE A DEAL!!! The business of international trade…

Global Trade For countries to grade goods and services, they must also trade their currencies. The process of converting one currency to another is known.

The International Monetary System: Order or Disorder? 19.

Determinants of Exchange Rates. Why Study Exchange Rates? To understand the economic environment –Forecasting for planning purposes To understand exposure.

Section 3: International Economics 3.2 Exchange Rates.

Tutor2u ™ Exchange Rates A2 Economics Presentation 2005.

Investing 101 Lesson 3 Economic Influences. Review!? Again! What is a bond? What is a coupon? How big is the bond market? How long is the life of a bond?

Unit 5, Lesson 13 Currency Fluctuation and Purchasing Power AOF Business Economics Copyright © 2008–2011 National Academy Foundation. All rights reserved.

International Business Basics 3-1. Trading Among Nations Domestic Business International Business (Foreign or world trade) Making, buying, and selling.

MONETARY POLICY. What is it?  The use of interest rates and the money supply to control aggregate demand in the economy.

19 The World of International Finance. HOW EXCHANGE RATES ARE DETERMINED What Are Exchange Rates? exchange rate The price at which currencies trade for.

The Balance of Payments & Exchange Rates. Balance of Payments The total of all economic transactions between a nation and the rest of the world Credits-

AS Economics PowerPoint Briefings 2007 tutor2u ™ tutor2u ™ Exchange Rates.

Chapter 38 The Balance of Payments, Exchange Rates, and Trade Deficits

Foreign Exchange If a certain good costs $100, how many euros does it cost? So nations have worked out systems that facilitate the exchange of currencies.

Analyze cost/profit relationships to guide business decision making.

International Business 9e

In-Class Final Exam Review

Principles of Economics 2nd edition by Fred M Gottheil

INTERNATIONAL FINANCE

Open-Market Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Foreign Exchange & Balance of Payments

Exchange Rates.

Balance of Payments.

AOF Business in a Global Economy

Flow of Capital: Net Foreign Investment

Bell Activity How do you think your life would be different without foreign-made goods?

Dr. Hange A.S. International Economics

Capital Flows and the Balance of Payments and The Foreign Exchange Market Lesson 39 Sections 41, 42.

The Foreign Exchange Market

M42: The Foreign Exchange Market

International Economics The Foreign Exchange Market

The Foreign Exchange Market

Business in the Global Economy

Movie Response What are the advantages, disadvantages of Globalization? What is the difference between comparative and absolute advantage? Identify and.

Market Determinants of Exchange Rates

IV. Development, Trade, and Money Management

Measuring the Value of Trade

Theme I Lesson 1: Introduction to Economics

Business in the Global Economy

Balance of Payments & Exchange Rates

Balance of Trade Trade, The Balance of Payments and Exchange Rates By, Dr. deshmukh v.v.

Open-Economy Macroeconomics: Basic Concepts

The Balance of Payments, Exchange Rates, and Trade Deficits

Chapter 19 Section 1.

Business in the Global Economy

Unit 1, Lesson 2 What Do Economists Study?

EXCHANGE RATE DETERMINATION Arun Mishra

Presentation transcript:

Unit 5, Lesson 13 Currency Exchange AOF Business Economics Unit 5, Lesson 13 Currency Exchange Copyright © 2008–2011 National Academy Foundation. All rights reserved. Copyright © 2008–2011 National Academy Foundation. All rights reserved.

Currency is a type of commodity Currencies can be exchanged and purchased for an agreed-upon value, just like other commodities. Copyright © 2008–2011 National Academy Foundation. All rights reserved.

Like other commodities, currencies have markets Currencies can be bought and sold in several ways, including: Interbank trading From banks Through brokers and traders In what ways are currency markets similar and different from the stock market? Copyright © 2008–2011 National Academy Foundation. All rights reserved.

The exchange rate is the market value of a currency, and it reflects supply and demand Generally, the more a currency is in demand, the higher its value. If a currency is overvalued, are more or fewer people likely to buy it? Copyright © 2008–2011 National Academy Foundation. All rights reserved.

Many factors influence the demand for a currency Positive Negative Stable government Low inflation Strong, stable economic growth Positive trade balance (exports exceed imports) Unstable government High inflation Slow or erratic economic growth Trade deficit (imports exceed exports ) Copyright © 2008–2011 National Academy Foundation. All rights reserved.

Understanding currencies is important for businesses Businesses deal with currency exchange in many different ways: Purchase resources and labor in foreign currencies Sell products and services in foreign currencies Invest their earnings in foreign currencies Buying resources and labor Currency out Currency in Selling products Copyright © 2008–2011 National Academy Foundation. All rights reserved.

Business economists contribute to important decisions about currencies They help businesses forecast the values of the different currencies in which they trade They help make decisions about which markets to sell goods and services in They understand how costs vary to produce goods in different countries Copyright © 2008–2011 National Academy Foundation. All rights reserved.