Chapter 11 Exchange Rate Determination

Chapter 11 Exchange Rate Determination - Chapter 11...

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Unformatted text preview: Chapter 11 Exchange Rate Determination Whats different about international money? o Trades between countries have to be valued in someones money o Value changes of money can drastically change profitability of a deal Money o What is money? Money is a storehouse of trust Money in international settings, is a medium of exchange only if people trust they will be able to exchange currency received at a later date for similarly valued good Money in international settings, is only a unit of account if people trust the currency to hold value against other currencies Money in international settings, is only a store of value if people trust the currency value to remain stable against other currencies with time o Do you have to accept it? Question of how much one trusts the government that issued the currency to continue supporting it o Who backs electronic money? Digital codes trying to convey a value What lead us here?...
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This note was uploaded on 04/09/2012 for the course GEB 3375 taught by Professor Sweo during the Spring '08 term at University of Central Florida.

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Chapter 11 Exchange Rate Determination - Chapter 11...

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