tailieunhanh - Lecture Introduction to economics: Social issues and economic thinking: Chapter 13 - Wendy A. Stock

Chapter 13 - Foreign exchange and the international trade of money. After completing this unit, you should be able to: Understand how foreign exchange markets operate, demonstrate how foreign exchange rates are determined, describe how foreign exchange rates influence international trade. | Introduction to Economics: Social Issues and Economic Thinking Wendy A. Stock PowerPoint Prepared by Z. Pan Chapter 13 Foreign Exchange and the International Trade of Money Copyright © 2013 John Wiley & Sons, Inc. / Photo Credit: ©MARIA TOUTOUDAKI/iStockphoto 1 Understand how foreign exchange markets operate Demonstrate how foreign exchange rates are determined Describe how foreign exchange rates influence international trade Copyright © 2013 John Wiley & Sons, Inc. 2 After studying this chapter, you should be able to: 2 The Exchange Rate is the rate at which one currency can be exchanged for another. It is usually stated in terms of how many units of one currency can be bought with one unit of a different currency. . 1 USD = EUR Copyright © 2013 John Wiley & Sons, Inc. 3 FOREIGN EXCHANGE MARKETS 3 The demand for Euros comes from people who need to exchange . dollars for Euros. . . importers of French wine or other products, . tourists, and . investors who want to invest in French companies. The supply of Euros comes from people and firms who want to buy . dollars. . French citizens or businesses want to purchase . goods and services or travel to the . Copyright © 2013 John Wiley & Sons, Inc. 4 The demand and supply of foreign currencies 4 Copyright © 2013 John Wiley & Sons, Inc. 5 Foreign exchange market 5 Copyright © 2013 John Wiley & Sons, Inc. 6 Foreign exchange market 6 Copyright © 2013 John Wiley & Sons, Inc. 7 Changes in Demand and Supply 7 When the price of currency A rises relative to currency B, currency A has appreciated. When the price of currency A falls relative to currency B, currency A has depreciated. Copyright © 2013 John Wiley & Sons, Inc. 8 Appreciation vs. depreciation 8 Copyright © 2013 John Wiley & Sons, Inc. 9 Changes in Demand and Supply 9 Tastes and Preferences: Changes in tastes and preferences for a certain country’s goods and services can change the demand for that country’s currency. Income: Assuming | Introduction to Economics: Social Issues and Economic Thinking Wendy A. Stock PowerPoint Prepared by Z. Pan Chapter 13 Foreign Exchange and the International Trade of Money Copyright © 2013 John Wiley & Sons, Inc. / Photo Credit: ©MARIA TOUTOUDAKI/iStockphoto 1 Understand how foreign exchange markets operate Demonstrate how foreign exchange rates are determined Describe how foreign exchange rates influence international trade Copyright © 2013 John Wiley & Sons, Inc. 2 After studying this chapter, you should be able to: 2 The Exchange Rate is the rate at which one currency can be exchanged for another. It is usually stated in terms of how many units of one currency can be bought with one unit of a different currency. . 1 USD = EUR Copyright © 2013 John Wiley & Sons, Inc. 3 FOREIGN EXCHANGE MARKETS 3 The demand for Euros comes from people who need to exchange . dollars for Euros. . . importers of French wine or other products, . tourists, and . investors who want