Foreign Exchange and International Finance CHAPTER 7 11/19/2018 CHAPTER 7 Foreign Exchange and International Finance 7-1 Money Systems Around the World 7-2 Foreign Exchange And Currency Controls 7-3 Currency Transactions Between Nations INTERNATIONAL BUSINESS
LESSON 7-1 Money Systems Around the World GOALS Explain the role of money and currency systems in international business. Identify factors that affect the value of currency.
Money and Currency Systems 7 Money and Currency Systems What is money? Acceptability Scarcity Durability Divisibility Portability Why is money used? Medium of exchange Measure of value Store of value
Foreign Exchange 7 Balance of payments Economic conditions Money supply and demand Risk Inflation Political Stability
LESSON 7-2 Foreign Exchange and Currency Controls GOALS Discuss foreign exchange activities. Describe the main activities of the World Bank and the International Monetary Fund.
Foreign Exchange Activities 7 Foreign Exchange Activities Changing exchange rates The foreign exchange market Foreign exchange controls
Japanese Yen Per U.S. Dollar 7 Japanese Yen Per U.S. Dollar
International Financial Agencies 7 International Financial Agencies The World Bank International Monetary Fund (IMF) Analyze economic situations Suggest economic policies Provide loans
LESSON 7-3 Currency Transactions Between Nations GOALS Discuss payment methods and financial sources for international business transactions. Explain other payment methods and financial documents used in international trade.
International Financial Transactions 7 International Financial Transactions Foreign trade payment methods Cash in advance Letter of credit Sale on account Sources of international financing Short-term financing Long-term financing
Other Payment Methods and Financial Documents 7 Other Payment Methods and Financial Documents Promissory note Bill of exchange Electronic funds transfer (EFT) Commercial invoice Insurance certificate
7 A Commercial Invoice