Lesson 4 International Exchange Rates Lesson 4 International

Lesson 4 International Exchange Rates Objectives: Understand foreign exchange Identify exchange rates Recognize how

Foreign Exchange Foreign exchange is the process of converting the currency of one country

Currencies of the World Here a few types of currency used around the world:

Calculating Exchange Some currencies will be worth more than the U. S. dollar and

Check Your Understanding What is foreign exchange? Converting the currency of one country to

Check Your Understanding Convert $25 U. S. dollars to proper amount in the following

Exchange Rates and International Trade Companies in foreign countries typically want to deal in

Exchange Rates and International Trade The more it costs to purchase a foreign currency,

Check Your Understanding How does the exchange rate affect international trade? The exchange rate

Summary Understand foreign exchange Identify exchange rates Recognize how exchange rates affect international business

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Lesson 4: International Exchange Rates

Lesson 4 International Exchange Rates Objectives: Understand foreign exchange Identify exchange rates Recognize how exchange rates affect international business

Foreign Exchange Foreign exchange is the process of converting the currency of one country into the currency of another country. The exchange rate is the amount of currency of one country that can be traded for one unit of currency of another country.

Currencies of the World Here a few types of currency used around the world: India – Rupee Mexico – Peso France – Euro Sweden – Franc China – Yuan Thailand – Baht

Calculating Exchange Some currencies will be worth more than the U. S. dollar and some will be less. To calculate the exchange rate: a*b=c a = the amount of money you want to exchange b = the exchange rate c = the money you will have after the exchange a*b=c $50 * €. 77 = € 38. 50

Check Your Understanding What is foreign exchange? Converting the currency of one country to the currency of another country.

Check Your Understanding Convert $25 U. S. dollars to proper amount in the following currencies (exchange rate listed): 1. Euro (1. 32) € 18. 91 2. Peso (13. 28) ₱ 332. 12 3. Rupee (67. 11) ₨ 1677, 75 4. Baht (32. 09) ฿ 802. 28

Exchange Rates and International Trade Companies in foreign countries typically want to deal in their own currency. In order to purchase products in another country, their currency must first be purchased. This has a big impact on international sales. Why?

Exchange Rates and International Trade The more it costs to purchase a foreign currency, the stronger that currency is. The stronger a country’s currency is, the more its exports will cost. IMPORTS The weaker a country’s currency is, the cheaper its exports will be. EXPORTS An imbalance of trade can occur. Imports will rise, while exports decrease. DEMAND EXPORTS At lower prices, demand will rise and exports will increase.

Check Your Understanding How does the exchange rate affect international trade? The exchange rate affects the costs of imports and exports, which can impact the economic condition of a country.

Summary Understand foreign exchange Identify exchange rates Recognize how exchange rates affect international business