Measuring the Value of Trade

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Presentation transcript:

Measuring the Value of Trade Unit 17.3

Foreign Exchange Foreign Exchange Markets Foreign Exchange Rate Currencies can be bought and sold Foreign Exchange Rate Price of a currency in the currency of another nation Fixed Rate of Exchange Value of currencies are fixed with regard to each other Flexible Rate of Exchange Floating currency market Trade Weighted Value of the Dollar Strong dollar vs weak dollar

Balance of Trade Balance of Trade Balance of Payments Trade Surplus Exports minus imports Balance of Payments Money coming in versus money going out Trade Surplus When exports > imports Trade Deficit When imports > exports