unit 2 overview – business fundamentals chapter 2 – international business practices chapter 2...
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Unit 2 Overview – BUSINESS FUNDAMENTALS
Chapter 2 – International Business Practices
Chapter 2 –Access to Markets
Chapter 2 – Trade Barriers
Culminating Activity for Unit 2 – Unit Test Tentative Date Oct 22, 2015
Chapter 2 – Currency Fluctuations
Chapter 2: TRADE IN THE MODERN WORLD
Fundamentals of International BusinessCopyright © 2010 Thompson Educational Publishing, Inc.
Currency Fluctuations – A Barrier?Currency Fluctuations – A Barrier?
Exchange rateExchange rate
The amount of one country’s currency in _________ to the currency of _________country.
The Canadian dollar (CAD) is most often quoted against the ___________ because the two countries are the _________trading partners in the _________.
Chapter 2: TRADE IN THE MODERN WORLD
Fundamentals of International BusinessCopyright © 2010 Thompson Educational Publishing, Inc.
Currency Fluctuations
Winners of a High Canadian Dollar __________________________– costs are lower; consumer
goods are lower and results in more spending Canadian travelers e.g. to the U.S.
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Chapter 2: TRADE IN THE MODERN WORLD
Fundamentals of International BusinessCopyright © 2010 Thompson Educational Publishing, Inc.
Currency Fluctuations
Losers of a High Canadian Dollar __________________________– higher cost of goods sold to
other countries; companies may relocate resulting in loss of jobs
Canadian ___________– e.g. high cost of travel Canadian _______________– e.g. buyers will go
to U.S. to shop
Chapter 2: TRADE IN THE MODERN WORLD
Fundamentals of International BusinessCopyright © 2010 Thompson Educational Publishing, Inc.
Factors Affecting the Exchange Rate
______________ rate______________ rate
An exchange rate that is not fixed in An exchange rate that is not fixed in relation to other currencies. relation to other currencies.
The price at which currency with a floating rate is
bought and sold _________________ _________________ according to _________ and _____________.
Chapter 2: TRADE IN THE MODERN WORLD
Fundamentals of International BusinessCopyright © 2010 Thompson Educational Publishing, Inc.
Currency Fluctuations
Currency Currency __________________________
The increase in value of a currency because the demand for that particular currency is greater than the supply.
Currency Currency ________________________________
The decrease in value of a currency because the supply of that particular currency is greater than the demand for it.
Chapter 2: TRADE IN THE MODERN WORLD
Fundamentals of International BusinessCopyright © 2010 Thompson Educational Publishing, Inc.
Currency Fluctuations
Factors Affecting the Exchange RateFactors Affecting the Exchange Rate ____________ conditions in Canada—inflation rate,
unemployment rate, GDP, interest rates Trading between countries—the more favourable the
terms of trade (comparison of exports to imports), the higher the currency exchange
_____________ - tension and instability or the threat of terrorism decreases the demand for a currency
_____________ factors—historical significance and stability change the way currencies are viewed
Chapter 2: TRADE IN THE MODERN WORLD
Fundamentals of International BusinessCopyright © 2010 Thompson Educational Publishing, Inc.
Currency Fluctuations
___________ currencies
Stable currencies, such as the euro, and the U.S. and Canadian dollars, which are easily converted to other currencies on the world exchange markets.
__________ currencies
A currency belonging to a country with an economy that is small, weak, or that fluctuates often, and is difficult to convert into other currencies, such as the Russian ruble or the Chinese yuan.
Chapter 2: TRADE IN THE MODERN WORLD
Fundamentals of International BusinessCopyright © 2010 Thompson Educational Publishing, Inc.
Currency Fluctuations Currency Fluctuations - Currency speculatingCurrency speculating
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Buying, holding, Buying, holding, or selling foreign or selling foreign currency in currency in anticipation of its anticipation of its value changing in value changing in order to profit order to profit from fluctuations from fluctuations in the price of in the price of currencycurrency
Buying, holding, Buying, holding, or selling foreign or selling foreign currency in currency in anticipation of its anticipation of its value changing in value changing in order to profit order to profit from fluctuations from fluctuations in the price of in the price of currencycurrency
CURRENCY ACTIVITY
Chapter 2: TRADE IN THE MODERN WORLD
Fundamentals of International BusinessCopyright © 2010 Thompson Educational Publishing, Inc.
Currency Challenge
Ms. Dale still has 3,000MYR in her bank in Malaysia.
Looking at the exchange rate between Malaysia and Canada, how many Canadian dollars will she get?
Watch the exchange rate from today til Friday. What do you think is the best rate?
Chapter 2: TRADE IN THE MODERN WORLD
Fundamentals of International BusinessCopyright © 2010 Thompson Educational Publishing, Inc.
Chapter 2: TRADE IN THE MODERN WORLD
Fundamentals of International BusinessCopyright © 2010 Thompson Educational Publishing, Inc.
Time Zones – A Barrier?Time Zones – A Barrier?
Time ZonesTime Zones Communication technology allows the world of
international business to operate ___________ hours a day
Certain methods of communication can be used at any time (_________); other methods (________) require knowledge of time zones
Some methods offer immediate feedback and interaction; others do not
Chapter 2: TRADE IN THE MODERN WORLD
Fundamentals of International BusinessCopyright © 2010 Thompson Educational Publishing, Inc.
Time ZonesTime Zones
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