Answers to Questions Regarding International Finance

Well it’s not good special for international student, we have to change more in our currency money to be US dollar. When U.S dollars stronger than national currency, import are less expensive. So American people can buy products good and services cheaper. In face it will lead to increase demand for the currency needed to purchase products and imported products because you can buy more products or the product is cheaper and it increase the economies in US. For example, we order clothes from china the same amount of money, we can buy more cloth and we won’t have to spend many money to do it. But for the business local currency becomes weak and down in valve, then the products in US are importing become more expensive. Also increase in the demand on the foreign change market more increases the price of its currency, Other country become demanding more US Dollars in order to pay for these services and commodities. International labor increase more if US dollars more strong so They can change US dollars more money in their countries, Changes in nationwide incomes in foreign countries as well as in the United States. On other hand export less because US dollars strong and other countries decrease demand products from US because US products good is more expensive. Also people buy foreign products rather than domestically produced goods and become to effect to US export. It capacity make business

The _____________ is a market for converting the currency of one country into that of another.

The difference between the present value of an investment?s future cash flows and its initial cost is the:

· What happens when there is a surplus of imports brought into the U.S.? Cite a specific example of a product with an import surplus, and the impact that has on the U.S. businesses and consumers involved. When there is a surplus of imports brought into the U.S. it means that the price of the product(s) will drop. U.S. companies that are competing with the Chinese made products will suffer from price drops of the goods. With consumers it will benefits the consumer with the lower price on goods. Large screen LCD/HDTV is a good example. Since the recession there has been a surplus of large screen HDTV. Not many people can afford or buy them since the prices were high. Now large screen LCD/HDTV is much cheaper than what it was 4 years ago.

C. Security returns are about as equally correlated across countries as they are within a county

None of the currency’s talked about in the article are effective ways of regulating trade. For example, salt being used as a currency would allow anyone to go and mine salt therefor circumnavigating the entire department of treasury, and almost equal to copying the dollar bill. For another example, knives

- For the foreign producers, when their currency weakens, production becomes cheaper (especially if they have currency reserves in dollars), and their sales go up, since the weaker currency is more attractive to foreign buyers.

The dollar is the most widely used and most influential currency throughout the globe. This has allowed it to do many things including having other countries rely on it. This allows the US to exert its influence internationally. This also lets the US keep the possibility of a balance of payments crisis near improbable. This is because other countries trust in the dollar and its safety. When other countries buy our bonds or provide loans, they do so in dollars. This is advantageous to the US because it allows us to

The terms medium of exchange. store of value (purchasing power jumping time segments), and unit of account (quoting prices) were the terminology utilized on page 190 of chapter ten. After this terminology, the section commodity and fiat monies was written. The functional weight from Principles of Macroeconomics is that commodity monies are tangibly traded with the use in in realization and fiat monies “{are} items designated as money that are intrinsically worthless” (p. 191). After the section on commodity and fiat monies concluded with a summation regarding currency debasement, Case, Fair, and Oster listed two equations for transaction money and broad money. The transaction money equation was M1 = currency held outside banks + demand deposits + travelers’ checks +

In order to minimise the effect of the potential losses due to foreign currency exchange rate, it essential to understand the use of financial instrument.

International trading of currency within different countries has some of the same terms with the same meaning. None the less, although each country has a monetary system, problems can still arise whenever the exchange of capital is taking place remotely. Brigham

As consumers, we all live in a society where our needs and wants are the drive for our consumption of certain goods and services. At this point elements of supply and demand are factored into the equation: in order to supply some goods and services that are being demanded countries rely on importing and exporting. To obtain these goods and services some form of compensation/ incentive is needed. Conducting trade by means of barter is not very practical in most circumstances and today’s society. So we use money. Different countries use different forms of money: the Dollar in the United States of America, the Euro in Europe, the Pound in The United Kingdom and in China the Renminbi .What happens when countries who want to trade with each other use different forms of money, when their units of monetary exchange are not the same? Common sense would tell the buyer to exchange their currency to match that of the sellers, and so they do so.

Consequences regarding the international businesses and the flow of trade and investment among the three countries are given below as benefits and drawbacks of holding fixed exchange rate system-

selected currencies is one of the approaches to make money. For the past many years,

In narrow terms foreign exchange simply means foreign currency or money transfer to any other