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Foreign Exchange and International Finance

7. CHAPTER. 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. GOALS. Explain the role of money and currency systems in international business.

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Foreign Exchange and International Finance

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  1. 7 CHAPTER 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

  2. GOALS Explain the role of money and currency systems in international business. Identify factors that affect the value of currency. 7 LESSON 7-1Money Systems Around the World

  3. What is money? Acceptability Scarcity Durability Divisibility Portability Why is money used? Medium of exchange Measure of value Store of value 7 Money and Currency Systems

  4. 7 Foreign Exchange • Balance of payments • Economic conditions • Money supply and demand • Risk • Inflation • Political Stability

  5. GOALS Discuss foreign exchange activities. Describe the main activities of the World Bank and the International Monetary Fund. 7 LESSON 7-2Foreign Exchange and Currency Controls

  6. 7 Foreign Exchange Activities • Changing exchange rates • The foreign exchange market • Foreign exchange controls

  7. 7 Japanese Yen Per U.S. Dollar

  8. 7 International Financial Agencies • The World Bank • International Monetary Fund (IMF) • Analyze economic situations • Suggest economic policies • Provide loans

  9. GOALS Discuss payment methods and financial sources for international business transactions. Explain other payment methods and financial documents used in international trade. 7 LESSON 7-3Currency Transactions Between Nations

  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. 7 Other Payment Methods and Financial Documents • Promissory note • Bill of exchange • Electronic funds transfer (EFT) • Commercial invoice • Insurance certificate

  12. 7 A Commercial Invoice

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