The Impact Of Exchange Rate Changes:
Gbogbo ọrọ náà
When a business buys from or sells to other countries, the value of its currency suddenly matters a great deal. A small shift in the exchange rate can turn a profitable export order into a loss, or make imported materials far more expensive overnight. For any business that trades across borders, exchange rates are a fact of life.
In this lesson you will learn what it means for a currency to appreciate or depreciate, and how those changes affect businesses as importers and as exporters, through their prices, competitiveness and profitability. You will not be asked to do exchange-rate calculations, but you must be able to explain the effects clearly.
Ebumnobi
- Depreciation and appreciation of an exchange rate
- How exchange rate changes can affect businesses as importers and exporters of products, e.g. prices, competitiveness, profitability (exchange rate calculations will not be assessed)
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Ekele diri gi maka imecha ihe karịrị na The Impact Of Exchange Rate Changes:. Ugbu a na ị na-enyochakwa isi echiche na echiche ndị dị mkpa, ọ bụ oge iji nwalee ihe ị ma. Ngwa a na-enye ụdị ajụjụ ọmụmụ dị iche iche emebere iji kwado nghọta gị wee nyere gị aka ịmata otú ị ghọtara ihe ndị a kụziri.
Ị ga-ahụ ngwakọta nke ụdị ajụjụ dị iche iche, gụnyere ajụjụ chọrọ ịhọrọ otu n’ime ọtụtụ azịza, ajụjụ chọrọ mkpirisi azịza, na ajụjụ ede ede. A na-arụpụta ajụjụ ọ bụla nke ọma iji nwalee akụkụ dị iche iche nke ihe ọmụma gị na nkà nke ịtụgharị uche.
Jiri akụkụ a nke nyocha ka ohere iji kụziere ihe ị matara banyere isiokwu ahụ ma chọpụta ebe ọ bụla ị nwere ike ịchọ ọmụmụ ihe ọzọ. Ekwela ka nsogbu ọ bụla ị na-eche ihu mee ka ị daa mba; kama, lee ha anya dị ka ohere maka ịzụlite onwe gị na imeziwanye.
- Appreciation of a currency means it has: A. fallen in value against another currency B. risen in value against another currency C. been withdrawn from use D. stayed exactly the same Answer: B
- When a country's currency depreciates, its exports become: A. cheaper in foreign markets B. more expensive in foreign markets C. unchanged in price D. illegal to sell Answer: A
- An appreciation of the currency is good news for a business that: A. exports all its output B. imports most of its materials C. sells only at home with home-made materials D. pays no taxes Answer: B
- A depreciation of the currency makes imported raw materials: A. cheaper B. more expensive C. free D. tax-exempt Answer: B
- The exchange rate is best defined as: A. the cost of borrowing money B. the price of one currency in terms of another C. a tax on imports D. the total output of a country Answer: B
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Global Trade in the United States
Why is global trade important to the United States, and how is it measured?
"Introduction to Business: Global Trade in the United States" by OpenStax, OpenStax, Rice University, licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). Source: https://openstax.org/books/introduction-business/pages/3-1-global-trade-in-the-united-states. Access for free at https://openstax.org/books/introduction-business/pages/1-introduction
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