GB--Ch. 7 PPT
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Transcript GB--Ch. 7 PPT
CHAPTER
7
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
© 2011 South-Western | Cengage Learning
CHAPTER
INTERNATIONAL BUSINESS, 4e
7
LESSON 7-1
Money Systems Around the World
GOALS
Explain the role of money and
currency systems in international
business.
Identify factors that affect the value
of currency.
© 2011 South-Western | Cengage Learning
SLIDE 2
CHAPTER
INTERNATIONAL BUSINESS, 4e
7
Money and Currency Systems
What is money?
Acceptability
Scarcity
Durability
Divisibility
Portability
Why is money used?
Medium of exchange
Measure of value
Store of value
© 2011 South-Western | Cengage Learning
SLIDE 3
CHAPTER
INTERNATIONAL BUSINESS, 4e
7
Foreign Exchange
Balance of payments
Economic conditions
Money supply and demand
Risk
Inflation
Political Stability
© 2011 South-Western | Cengage Learning
SLIDE 4
CHAPTER
INTERNATIONAL BUSINESS, 4e
7
LESSON 7-2
Foreign Exchange and Currency Controls
GOALS
Discuss foreign exchange activities.
Describe the main activities of the
World Bank and the International
Monetary Fund.
© 2011 South-Western | Cengage Learning
SLIDE 5
CHAPTER
INTERNATIONAL BUSINESS, 4e
7
Foreign Exchange Activities
Changing exchange rates
The foreign exchange market
Foreign exchange controls
© 2011 South-Western | Cengage Learning
SLIDE 6
CHAPTER
INTERNATIONAL BUSINESS, 4e
7
Japanese Yen Per U.S. Dollar
© 2011 South-Western | Cengage Learning
SLIDE 7
CHAPTER
INTERNATIONAL BUSINESS, 4e
7
International Financial Agencies
The World Bank
International Monetary Fund (IMF)
Analyze economic situations
Suggest economic policies
Provide loans
© 2011 South-Western | Cengage Learning
SLIDE 8
CHAPTER
INTERNATIONAL BUSINESS, 4e
7
LESSON 7-3
Currency Transactions Between Nations
GOALS
Discuss payment methods and
financial sources for international
business transactions.
Explain other payment methods
and financial documents used in
international trade.
© 2011 South-Western | Cengage Learning
SLIDE 9
CHAPTER
INTERNATIONAL BUSINESS, 4e
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
© 2011 South-Western | Cengage Learning
SLIDE 10
CHAPTER
INTERNATIONAL BUSINESS, 4e
7
Other Payment Methods and
Financial Documents
Promissory note
Bill of exchange
Electronic funds transfer (EFT)
Commercial invoice
Insurance certificate
© 2011 South-Western | Cengage Learning
SLIDE 11
CHAPTER
INTERNATIONAL BUSINESS, 4e
7
A Commercial Invoice
© 2011 South-Western | Cengage Learning
SLIDE 12