FINANCING AND TRADE DEFICITS
FINANCIAL INTERNATIONAL TRADE
Foreign Exchange is foreign currencies used to facilitate international trade. They are bought in the foreign exchange market.
Their are to major kinds of exchange rates: Fixed, and Flexible
Fixed rates were very common during the gold standard. In the 1960s when imports became extremely important the Fixed rate started to die out
Flexible Exchange rates are the forces of supply and demand establish the value of one country's currency. This has worked really well.
TRADE DEFICITS AND SURPLUSES
A trade deficit is when the value of imports is bigger than the value of exports
A trade surplus is when the value of exports is bigger than the value of imports
The value of the dollar in the foreign market has constantly been changing over the past few decades
When you have a constant trade deficit other countries may not want to trade with you as much.
Foreign Exchange is foreign currencies used to facilitate international trade. They are bought in the foreign exchange market.
Their are to major kinds of exchange rates: Fixed, and Flexible
Fixed rates were very common during the gold standard. In the 1960s when imports became extremely important the Fixed rate started to die out
Flexible Exchange rates are the forces of supply and demand establish the value of one country's currency. This has worked really well.
TRADE DEFICITS AND SURPLUSES
A trade deficit is when the value of imports is bigger than the value of exports
A trade surplus is when the value of exports is bigger than the value of imports
The value of the dollar in the foreign market has constantly been changing over the past few decades
When you have a constant trade deficit other countries may not want to trade with you as much.