Ch. 17 Section 3

By: Jaden Trowell, Michelle Burrito, Ramiro Torres & Juan B.

Exchange Rate

  • Exchange rates: International trade takes place whenever a good or service is produced in one country.
  • Foreign Exchange: Changing money from one currency to another - allows you to convert prices in one currency to prices in another currency.

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Appreciation vs. Depreciation

  • Appreciation: Increase in the value of a currency.
  • Depreciation: Decrease in the value of a currency.

Export / Import

  • Export: Goods sent to another country for sale.
  • Import: Goods brought in from another country for sale.

Balance of Trade

  • Definition: the relationship between a nations imports and its exports.
  • When a large difference between a nations imports and exports arises, it is said to have a trade imbalance.
  • by balancing trade, a nation can protect the value of its currency on the international market.

Surplus vs. Deficit

  • Surplus-- the result of a nation exporting more than its imports.
  • Trade Deficit-- the result of a nation importing more than its exports.