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MONEY SYSTEMS AROUND THE WORLD

7-1. LESSON. GOALS. MONEY SYSTEMS AROUND THE WORLD. Explain the role of money and currency systems in international business. Identify factors that affect the value of currency. What is money? Acceptability Scarcity Durability Divisibility Portability. Why is money used?

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MONEY SYSTEMS AROUND THE WORLD

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  1. 7-1 LESSON GOALS MONEY SYSTEMS AROUND THE WORLD Explain the role of money and currency systems in international business. Identify factors that affect the value of currency.

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

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

  4. 7-2 LESSON GOALS FOREIGN EXCHANGE AND CURRENCY CONTROLS Discuss foreign exchange activities. Describe the main activities of the World Bank and the International Monetary Fund.

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

  6. Japanese Yen Per U.S. Dollar

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

  8. 7-3 LESSON GOALS CURRENCY TRANSACTIONS BETWEEN NATIONS Discuss payment methods and financial sources for international business transactions. Explain other payment methods and financial documents used in international trade.

  9. 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

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

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