Measuring the value of trade

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Slide 1: Video
EconomieSecondary Education

This lesson contains 21 slides, with interactive quizzes, text slides and 2 videos.

Items in this lesson

Slide 1 - Video

Chapter 17
Section 3: Measuring value of Trade
Pages 526-531

Slide 2 - Slide

Objectives
Identify the key terms
Analyze the calculation of exchange rate
Discuss the process of finding the value of currency in a world market

Slide 3 - Slide

Key terms
​In the foreign
exchange market,  the currencies of different  countries are bought and  sold.​​
The foreign
exchange rate is the  price of a currency in  the currencies of other  nations.
​​Rates of Exchange ​​With a fixed rate
of exchange, the  currency of one nation is  fixed, or constant, in relation to other currencies.

Slide 4 - Slide

The flexible rate of exchange is a system in  
which the exchange rate for currency changes as  supply and demand for the
currency changes.​

Slide 5 - Slide

What is market in which the currencies of different
countries are bought and sold?
A
Fixed exchange rate
B
Foreign exchange rate
C
Foreign exchange market
D
Flexible rate of exchange

Slide 6 - Quiz

What is foreign exchange rate?

Slide 7 - Mind map

Find the difference between fixed exchange rate and flexible exchange rate.

Slide 8 - Open question

Do all currencies have a fixed rate? If not why?

Slide 9 - Mind map

Answer
No.This is a system in which the exchange rates for currencies change as
the supply of and demand for the currencies change

Slide 10 - Slide

Slide 11 - Video

Suppose you want to buy a book in Germany, where the currency is the euro (∈).
The book costs ∈20, and the seller wants you to pay in euros, but you have U.S. dollars.
To buy the book you must first buy euros. To find out how much ∈20 costs in U.S. dollars, you must know the exchange
rate.1 euro=$1.19

Slide 12 - Slide

Answer the above question here.

Slide 13 - Mind map

What would be the conversion of euro to BHD?Explain your answer.

Slide 14 - Open question

​The Federal Reserve keeps a measure of the international value of the dollar called the trade-weighted value of the dollar. It determines if the dollar is strong or weak as measured against another currency.

Slide 15 - Slide

What might cause the value of the U.S.
dollar to rise?

Slide 16 - Mind map

Answer
exchanges in the currency markets; the Fed’s printing more money; foreign investment; and speculation

Slide 17 - Slide

Why do U.S. imports become less
expensive?

Slide 18 - Open question

Why do exports become more
expensive?

Slide 19 - Mind map

Answer
because the buyers would have to spend more of their currency relative to the dollar to buy the good

Slide 20 - Slide

Ask a question to your friend.

Slide 21 - Mind map