1. © 2011 South-Western | Cengage Learning Foreign Exchange and International Finance 7-1 7-1Money Systems Around the World 7-2 7-2Foreign Exchange And Currency Controls 7-3 7-3Currency Transactions Between Nations CHAPTER 7

2. INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 2 7 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.

3. INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 3 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

4. INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 4 7 Foreign Exchange Balance of payments Economic conditions Money supply and demand Risk Inflation Political Stability

5. INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 5 7 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.

6. INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 6 7 Foreign Exchange Activities Changing exchange rates The foreign exchange market Foreign exchange controls

7. INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 7 7 Japanese Yen Per U.S. Dollar

8. INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 8 7 International Financial Agencies The World Bank International Monetary Fund (IMF) Analyze economic situations Suggest economic policies Provide loans

9. INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 9 7 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.

10. INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 10 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

11. INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 11 7 Other Payment Methods and Financial Documents Promissory note Bill of exchange Electronic funds transfer (EFT) Commercial invoice Insurance certificate

12. INTERNATIONAL BUSINESS, 4e CHAPTER © 2011 South-Western | Cengage Learning SLIDE 12 7 A Commercial Invoice