About This Chapter
Exchange Rates & Currency Rates - Chapter Summary
These informative business lessons help you review exchange and currency rates in an international business context. The chapter contains short and engaging instruction on topics such as exchange rate conversion, purchasing power, appreciation and depreciation, exchange rate risk and more. After you complete each lesson, you can take a short self-assessment quiz to check your understanding of the material. Lesson transcripts are also available to print so you can further reinforce what you learn. This chapter will enable you to:
- Determine and convert exchange rates across countries
- Know how fiscal and monetary policies affect exchange rates
- Define purchasing power and explain parity theory
- Understand how currency changes affect importing and exporting
- Evaluate the effect that exchange rate changes have on currency appreciation and depreciation
- Outline exchange rate risk and forms of exposure
- Explain the Big Mac index and purchasing power parity
1. Exchange Rate: Determination and Conversion Across Countries
Understand what exchange rates are and the different types that can be used by governments and countries. See how they operate and how the conversion process works across countries.
2. How Fiscal and Monetary Policies Affect the Exchange Rate
Discover how fiscal and monetary policy can affect the exchange rate and ultimately the amount of money it costs you to buy goods and services. Find out the three paths that both fiscal and monetary policy can travel to impact the exchange rate.
3. How Currency Changes Affect Imports and Exports
Learn about how currency changes can affect imports and exports. Find out how this affects you. Discover what happens when a dollar is strong compared to other currencies and what happens when it is weak.
4. Currency Appreciation & Depreciation: Effects of Exchange Rate Changes
Find out how changes in the exchange rate can affect the economy and your own individual situation. Discover how these currency changes can increase and decrease your purchasing power and standard of living.
5. Exchange Rate Risk & Forms of Exposure
International businesses face certain risks, including the risk of exchange rates being unfavorable. In this lesson, we'll explore forms of exchange rate exposure, including short-run, long-run, and translation exposure.
6. What is Purchasing Power? - Definition & Parity Theory
In this lesson, we'll be looking at purchasing power, which is used for computing the value of currency. After the lesson, you can test your knowledge with a short quiz.
7. Purchasing Power Parity & the Big Mac Index
In this lesson, we explore the Big Mac index, which analyzes whether currencies are at their correct levels using the theory of purchasing-power parity. We discuss the index and look at examples of how to read and use it.
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Other chapters within the Business 120: International Business course
- Introduction to International Business
- How Culture Affects International Business
- Global Economic Development
- Key Factors in International Trade
- International Trade Management & Regulation
- International Market Entry Strategies
- Management & Human Resources in International Business
- International Operations Management
- Global Marketing and R&D Strategies
- Communication & Decision-Making in Global Business
- Impact of Globalization on Organizations
- Impact of Globalization on Countries
- Global Business Ethics
- Future of Globalization
- Studying for Business 120