Exchange Rate

&Trade Policy

Exchange

* means the charge for exchanging currency of one country for currency of another ( charge per unit ) 

Trade Policy

* a government's policy controlling foreign trade ( open door policy ) 

Balance Payment

Balance Payment

* is a country's record of all transactions between its residents and the residents of all foreign nations.

Official transactions account

* is a part of the balance of payments account that records the amount of its own currency or foreign currency that a nation purchases or sells.

Official Reserves

* government holdings of foreign currencies,or buying or selling other international reserves such as gold.

Capital Account

* is the part of the balance of payments account in which all-short term flows of payments are listed

Current account has a 2 balances.

1. The Balance of Merchandise Trade

* is a dissimilarity between the value of goods exported and the value of goods imported

2. Balance of Trade

is the difference between

the value of goods andservice exported andimported becomes a

keystatistic for economics.

Exchange Rate

Basic Forces DeterminingExchange Rates

* means they're trying to

rate analysis is brokendown to fundamentalanalysis, short run

analysis

*Changes in Interest rates*Changes in

Country's Prices*Changes in

Country's Income

*Exchange Rate Determination is Complicated

*Fixed Exchanged Rate System

Alternative exchange

rate systems

1.Partially Flexible Exchange Rates

2.Flexible Exchange Rates

3.Fixed exchange rates

Exchange Rate Through Trade Policy

3 Kinds of Trade  Policies have as a

consequence giving in order to meet

balance of payments

1. They cause other countries to retaliate or get back/revenge

2. They put down Global Welfare

3. They stop or hinder competition

The GENERAL AGREEMENT on Tariffs and Trade(GATT), they curtail trade barriers, this was set up immediately following

World War 2, World Trade Organization (WTO) getting

countries to concur not to take advantage of new tariffs or other

trade restrictions.

Quotas

are quantity limits placed on

imports/prescribe number

Voluntary Restraint Agreements

agreements in which countries

voluntarily restrict their exports

Nationalistic Appeals

request can help to restrict international

trade

example:( buy filipino product)

Regulatory Trade Restrictions

government imposed procedural rules that

limit imports embarges a restriction

on the imports or exports of good

FREE TRADE

a policy of enabling

unrestricted trade among countries

Balance Trade

the commercial balance or net

exports

TRADE SURPLUS

a positive balance, consists of exporting more than is imported

TRADE DEFICIT

negative balance, or normally a

trade gap

Regulatory Trade Restrictions

- is an artificial restriction on the

trade of goods and/or services between two

countries

Strategic Trade Policies

-most countries used two types of

strategic trade policies

Tariff

a tax on imports or exports

Thank You!

Group 2Faith FalcunitinJayvee ObenaFrances Charls

Sabuya