Identification includes the use of money as
- medium of exchange
- measure of value
- store of value (savings mechanism).
Characteristics of currency include
- acceptability
- scarcity
- durability
- divisibility
- portability.
Foreign exchange factors that affect the value of currency include
- changing exchange rates
- foreign exchange market
- foreign exchange controls.
Process/Skill Questions:
- What are the main purposes of money?
- What factors affect exchange rates and cause currency fluctuations?
- How do economic conditions impact international business?
- What factors influence the value of a country’s currency?
- What approaches do national governments take to make sure exchange rates are at least a neutral factor in business transactions?
- What organizations make up the international monetary system?
- What are the characteristics associated with money?