1.  Why is money important to trade? ◦ It make trading easier (compared to bartering system) ◦ It helps people make exchanges ◦ It has an established value that they can store and use later ◦ It can be used to measure value and relative prices

2. Students experience how international trade works by exchanging U.S. dollars for foreign currencies to make purchases.

3.  I understand that currencies have different values and that I can exchange currencies.  Success Criteria… ◦ Identify foreign currencies and give examples ◦ Learn about the power of the U.S. dollar. ◦ Explain why they must exchange currency in order to trade with other countries. ◦ Explain the role of money in global trade ◦ Conduct transactions using foreign currency

4.  Do all countries use the same money? ◦ Some European countries do, Belgium, Germany, Greece, Spain, France, Estonia, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal, Finland, Cyprus, Malta, Slovenia, and Slovakia are the 17 members of the EU that use the Euro.

5.  Which currency do you think is the most widely traded currency in the world? ◦ The stability of the US dollar has made it the most widely traded currency in the world.  It doesn’t lose its value  The government doesn’t just print more ◦ The second most traded currency in the world is the Euro, primarily because so many countries use the Euro.

6.  Can you name other types of currencies that people use in the US and other countries?

7. CountryCurrencyOrigin of Name IndiaRupeeFrom the root meaning “Silver” RussiaRubleMeans “to cut” ChinaRMB or YuanMeans “the People’s Currency PeruSolMeans “the sun” BrazilRealMeans “the Southern Cross GermanyEuroCurrency now common among European Union Members GhanaCediMeans “Cowrie”, which is a type of shell that was used as currency in parts of Africa JapanYenMeans “round” and originated when Japanese money changed from being square to round EnglandPoundA pound of silver IsraelShekelMeans “weight”

8.  Do different currencies have the same value?  What do you need to know about a country’s money before you make plans to travel to a country for a vacation or to study abroad? ◦ The value of foreign currency will need to be compared to the US dollar, because it will determine how far their money will go in another country.

9. CurrencyUS DollarJapanese Yen Brazilian Real Euro Exchange Rate 1.095.02.0.80 These exchange rates are approximate and are not necessarily representative of the current exchange rate. We will use the rates for our next activity. An exchange rate tells the value of one country’s currency in terms of another. Exchange rates vary considerably between countries and change often, knowing the current exchange rate is important.

10. If the dollar is “weak” compared to a foreign currency, will items purchased in that country be more or less expensive then those bought at home?  They will be more expensive because it takes more dollars to buy that country’s.  They are converters online to help us out.  Approximate rates of exchange of the US dollar against various world currencies is reported every week in the Wall Street Journal.

11. Euro CurrencyUS DollarJapanese YenBrazilian RealEuro Exchange Rate 1.095.02.0.80

12. Travel to foreign countries where you exchange the US dollar to see how many goods and services you can buy

13. Page 35

14.  Currency Exchange Game ◦ You will “travel” to foreign countries where you will exchange US dollars to see how many goods and services you can purchases using foreign currencies. ◦ Turn to the Currency Exchange Game page in your student workbook. ◦ You have $200 to spend during a one day trip to each of the following countries: Mexico, England, China, and Japan. ◦ You must convert your US dollar to the currency of the country you are visiting. ◦ In each country you must buy as many items as you deem appropriate given the amount of foreign currency received. ◦ In addition, you need to choose between a hotel and hostel for your nights lodging. If you have any money left over, you should convert it back into dollars before leaving the country, completing the information at the bottom of each page. ◦ You will be given 10 minutes to complete this

15.  How do I exchange currency at International Towne?

16.  You will get paid in one type of currency (the currency from the region where you work) but you will have to exchange your currency to purchase goods/services from other regions.

17.  International Towne uses four regional currencies: EuRussia notes, PacAsia notes, MidAfri notes, and AmeriLat notes. ◦ EuRussia Notes are used in Italy, Germany, the Netherlands, United Kingdom, and Russia ◦ Egypt, Ghana, and Israel use MidAfri notes. ◦ The Pacific Rim countries of Australia, China, India, Japan, and Singapore use PacAsia notes. ◦ AmeriLat notes are used in Brazil, Canada, and Panama.  To purchase goods, citizens must use the appropriate currency. There are four regional currency exchange services available in the countries of Australia, Brazil, Ghana, and Italy.  Citizens receive their salaries in the currency of their country where they work.  Currencies can be exchanged at the International Bank in Singapore at any time during the day.

18. The Currency Exchange Table (passport version) should be found on the back of your Passports. The tables will make exchanging currency easier, because the math has already been done for you

21.  Example: ◦ A citizen works in Canada and receives her salary in AmeriLat notes. She wishes to buy a pair of sunglasses from Egypt. To do so, she must exchange her AmeriLat notes for MidAfri notes. ◦ She finds the table for MidAfri notes on the back of her passport. The sunglasses cost (15) MidAfri notes, so she finds the row that lists the price of (15) MidAfri notes and follows it across until it intersects with the AmeriLat column. The row and the column intersect at (20) MidAfri notes. She will need to exchange (20) AmeriLat notes for the 15 MidAfri notes she will need to buy the sunglasses

23.  Tables show the number of notes to exchange without having to solve an equation.  If you come across a price not listed on the table, you can still use a calculator and the exchange rate listed at the top of each column.

25.  How to convert prices ◦ Locate the type of currency you need in the gray column. ◦ Follow the row across until it intersects with the currency you have ◦ Enter into your calculator, the number in the box where the row and column intersect ◦ Multiple this number by the price of the item you wish to buy ◦ The answer will tell you how much currency you need to exchange in order to buy the item.

26. Currency NeededEuRussia Notes PacAsia Notes MidAfri Notes AmeriLat Notes 1 EuRussia Note=1234 1 PacAsia Note =.511.52 1 MidAfri Note =.33.6611.33 1 AmeriLat Note =.25.50.751 Example: You work in Ghana and get paid in MidAfri Notes. You want to buy a paper flower from Mexico. The price is 8 AmeriLat Notes. Begin by locating the AmeriLat Notes in the currency needed column Follow the row across until you get to the MidAfri column.75 X 8 = 6 You will need 6 MidAfri Notes to purchase the flower from Mexico Continue to practice on pages 39-40

27.  You should consider the easiest and the fastest way to make purchases.  Ask yourself: ◦ Is it to go to the International Bank and obtain the correct amount and type of currency every time you want to buy something, or to have some of each currency on hand so you always have the kind you need when youre out shopping? Also, is it wiser to save time, but spend a bit of money and exchange at a regional currency exchange office? Or is it easier to use your credit card?  The most frugal, easiest and most efficient way to get some of each currency is to visit the International Bank at the beginning of their first travel break.  You should divide your salary currency into four quasi- equal sets. (Based on the currency, some students will need to decide which currency they want more of-since the denominations will not divide perfectly into four equal parts). You should keep one set of your country’s currency and exchange the other three sets for the other three regional currencies.

28.  Look at the prices on the four different tables.  What do you notice? ◦ The prices in each country are multiples of a specific number. Prices in EuRussia notes are multiples of one. PacAsia prices are multiples of two. Prices in MidAfri notes are multiples of three. AmeriLat prices are multiples of four. ◦ All products sold in each country must be based on these multiple! Otherwise, we would need coins, which are not available. ◦ For example, if China decided to change the price of finger traps to 7 PacAsia notes nobody could buy them because you would be unable to give change. Products sold in PacAsia must be priced by multiples of 2, the denomination of the smallest bill in that region.

29.  You should initially sell your countries products and cultural activities for the prices listed on your Projected Revenue and Expenses sheets. ◦ However, if for some reason you need to change prices, you must set a new price that are the correct multiples for your country’s currency.  Finance Ministers will be directed to the International Bank in Singapore before Towne opens to pick up their citizen’s salary packets.  You can exchange currency at the International Bank at any time, but you may also exchange money at the four regional currency exchange offices for a small fee. These are located in Ghana, Italy, Australia, and Brazil.

30.  A Russian Chef in Russia gets paid (35) EuRussia notes ◦ Find the last row on the EuRussia Notes table (begins with the number 9) ◦ Count out salary currency into three sets of (9) notes each. (This leaves (8) EuRussia notes the Russian Chef will keep.)  Exchange the three sets of (9) notes at the International Bank for (18) PacAsia notes, (27) MidAfri notes, and (36) AmeriLat notes.  The Russian Chef now has some of each currency to use when travelling

31.  You are to practice by dividing the currency into sets, using the last row on the currency table for the type of currency they receive can help them feel comfortable exchanging currency  Next, come forward to the International Bank (teacher) and exchange currency.  Students can help by counting out currency for practice salary packets for the net group.

32. As you read the scenario, complete the Currency Log on page 41. This activity will provide you with solid practice so you can be ready for your own travels in International Towne

33.  When travelling around the world, it is important to keep track of your expenses, food, entertainment, and tourist items that they purchase.  Suddenly running out of money cannot only ruin a trip, but it can also make it difficult to return home!! Attempting to keep track of purchases by memory is not effective.  Turn to the Travelling Around the World page in your student workbook. Read through the scenario and complete the currency log on the next page.  Complete for Homework.

34. Classwork or homework

35.  Where did the dollar buy the most? The least?  People and businesses involved in international trade (importing and exporting) have to do the same thing that you did in your “travels.” That is, they must change their dollars into the currency of the trading country.

36.  In international Towne each country will use one of four regional currencies. Citizens are paid in the currency of the country where they work. You must visit the international bank in Singapore to exchange your currency for that of the other three regions. Or for a fee you can exchange your currency in one of the four regional currency exchange countries. Deciding where to exchange currency is an example where you need to understand the Time Value Money as well as opportunity costs.  International Towne countries must also exchange currencies when trading with other countries.