Ch. 17 Section 3
By: Jaden Trowell, Michelle Burrito, Ramiro Torres & Juan B.
- 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.
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.