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the price of one currency expressed in terms of another; the number of units of one currency that can be exchanged for another. It links different national currencies so that buyers and sellers can make international price and cost comparisons.

• exchange rate

• currency risk

• higher exchange rate

• lower exchange rate

A ___________ indicates a stronger currency, benefiting importers and travelers from the stronger currency’s country while boosting exporters in the weaker currency’s region.

• exchange rate

• currency risk

• higher exchange rate

• lower exchange rate

A ___________ signifies a weaker currency, benefiting exporters and travelers from the weaker currency’s country and importers in the stronger currency’s region

• exchange rate

• currency risk

• higher exchange rate

• lower exchange rate

potential harm that arises from changes in the price of one currency relative to another. It also known as financial risk.

• exchange rate

• currency risk

• higher exchange rate

• lower exchange rate

face risk because foreign buyers must either pay in a foreign currency or convert their currency to that of the vendor.

• exporter

• licensors

• exporters and licensors

• none of the choices

can be easily exchange for the currencies. The most easily convertible are the called hard currencies and include the British pound, European euro, Japanese yen, and U.S. dollar.

• currency

• convertible currency

• convertible

• nonconvertible

currency is _____________ when it is not acceptable for transactions. Some governments may not allow their currency to be converted into a foreign currency.  

• currency

• convertible currency

• convertible

• nonconvertible

represents all of the money that are traded internationally, including foreign currencies, bank deposits, checks, and electronic transfers

• currency

• Foreign exchange

• convertible

• nonconvertible

are a global marketplace for buying and selling national currencies.

• currency

• Foreign exchange

• convertible

• Foreign exchange markets

main factors influence the supply and demand for a currency

• Economic growth

• Inflation and Interest Rates  

• Market Psychology  

• Government Action

• Exchange Rate