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Foreign Exchange and International Finance

Understand the role of money in international business, factors influencing currency value, foreign exchange activities, and financial sources for global transactions. Learn about currency transactions, payment methods, and financial documents used in international trade.

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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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