Foreign Exchange and International Finance
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Transcript of Foreign Exchange and International Finance
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© 2011 South-Western | Cengage Learning
Foreign Exchange and International Finance
7-17-1 Money Systems Around the World7-27-2 Foreign Exchange And Currency
Controls 7-37-3 Currency Transactions Between
Nations
CHAPTER 7
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INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 2© 2011 South-Western | Cengage Learning
7LESSON 7-1
Money Systems Around the World
GOALSGOALSExplain the role of money and
currency systems in international business.
Identify factors that affect the value of currency.
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INTERNATIONAL BUSINESS, 4e CHAPTER
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Money and Currency Systems
What is money?AcceptabilityScarcityDurabilityDivisibilityPortability
Why is money used?Medium of exchangeMeasure of valueStore of value
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INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 4© 2011 South-Western | Cengage Learning
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Foreign Exchange
Balance of paymentsEconomic conditions
Money supply and demandRiskInflation
Political Stability
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INTERNATIONAL BUSINESS, 4e CHAPTER
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7LESSON 7-2
Foreign Exchange and Currency Controls
GOALSGOALSDiscuss foreign exchange activities.Describe the main activities of the
World Bank and the International Monetary Fund.
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INTERNATIONAL BUSINESS, 4e CHAPTER
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Foreign Exchange Activities
Changing exchange ratesThe foreign exchange marketForeign exchange controls
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INTERNATIONAL BUSINESS, 4e CHAPTER
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Japanese Yen Per U.S. Dollar
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INTERNATIONAL BUSINESS, 4e CHAPTER
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International Financial Agencies
The World BankInternational Monetary Fund (IMF)
Analyze economic situationsSuggest economic policiesProvide loans
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INTERNATIONAL BUSINESS, 4e CHAPTER
SLIDE 9© 2011 South-Western | Cengage Learning
7LESSON 7-3
Currency Transactions Between Nations
GOALSGOALSDiscuss payment methods and
financial sources for international business transactions.
Explain other payment methods and financial documents used in international trade.
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INTERNATIONAL BUSINESS, 4e CHAPTER
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International Financial Transactions
Foreign trade payment methodsCash in advanceLetter of creditSale on account
Sources of international financingShort-term financingLong-term financing
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INTERNATIONAL BUSINESS, 4e CHAPTER
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7Other Payment Methods and Financial Documents
Promissory noteBill of exchangeElectronic funds transfer (EFT)Commercial invoiceInsurance certificate
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INTERNATIONAL BUSINESS, 4e CHAPTER
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A Commercial Invoice