18/08/2015 Agricultural Economics – Exchange Rates AS90651 Explain how market forces affect supply and demand of primary products (4 external credits)

Slides:

Advertisements

Similar presentations

Please read this slowly to yourself. THINK about it. Ever been out of the country? Ever bought something from another country? Then you were part of the.

Advertisements

Exchange rates. Definition of exchange rates The price one currency in terms of another currency. The price one currency in terms of another currency.

Why Study Economics?. Famous Economic graduates….!

Please read this to yourself. Ever been out of the country? Ever bought something from another country? When you bought goods/services in that foreign.

Demand for U.S. Agricultural Output Much of the demand for U.S. Agricultural output has come from other countries.

Foreign trade In the next two lectures we will develop versions of the IS-LM and AD-AS models for an open economy. An open economy can have several meanings:

1 International Economic Activity. 2 Basic look at interaction with the rest of the world. When we talk about interactions with the rest of the world.

Slide Show #7 AGEC 430 Macroeconomics of Agriculture Spring 2010.

Foreign Exchange and Currencies Economics 71a Spring 2007 Mayo, Chapter 6 (skim) Lecture notes 2.6.

11/2/04Dr. PK Basu and Dr. Rod Duncan ECO 120 Macroeconomics Week 12 Open Economy & Exchange Rate Lecturer Dr. Rod Duncan.

Canada and the Depression

EXCHANGE RATES.

Chapter 10 (Pg 236) April Expansion- a period of economic expansion and growth. Economic activity is increasing. Peak- Expansions eventually.

Economic Goal 4: External Stability Exchange Rate.

AKA the “FOREX”. The Foreign Exchange Market Goods produced within a country must be paid for with that country’s currency International transactions.

Exchange Rate Systems  Flexible Exchange Rates  If the government simply allows their currency to vary freely (i.e. does not implement a contractionary/expansionary.

Exchange Rates and Agricultural Trade Chapter 17.

 How does demand and supply change when things happen in the economy, like:  Inflation  Unemployment  Levels of spending  Real output  We look at.

External Sector Econ 102 _2015. External Sector How is a country linked with other countries in the global world? 1)There are exchange of Goods and Services.

 We have several different exchange rates, one for each currency.  It measures how much we would get in terms of the other currency per $1 NZ.

Exchange rate policy NZ government’s exchange rate policy has a significant impact on a nation’s trade. We have in place a floating exchange rate since.

International Trade. Exports v. Imports Exports – goods sold to other countries Imports - goods bought from other countries.

CURRENCIES What’s in your wallet? How many currencies are in use around the world? 178.

March 25/26 Announcements Due: 4/2/15

Call to Order President Obama says that the government doesn’t have enough money to pay for all of the programs that he wants. Why doesn’t he just print.

AAEC 2305 Fundamentals of Ag Economics Chapter 8 International Trade.

Demand and Supply. In a market economy prices are set by a kind of interaction. The interaction is the effect that two forces- demand and supply- have.

Dollarization Erica Vega Marlene Mata. Dollarization  Adopting a foreign currency of choice in a country in parallel to or instead of the domestic currency.

Copyright © 2010 Pearson Addison-Wesley. All rights reserved. Chapter 17 The Foreign Exchange Market.

Measuring Trade. Exchange Rates Exchange rate: the value of one currency in terms on another currency. Exchange rate: the value of one currency in terms.

Voluntary Trade SS7E6 The student will explain how voluntary trade benefits buyers and sellers in Southwest Asia (Middle East). a. Explain how specialization.

Economic Concepts Review. Factors of Production Economic Types SupplyDemandMixed Bag

FACTORS THAT AFFECT PROFITABILITY. PHYSICAL AND CLIMATIC FACTORS.

3.2 Exchange Rates. Exchange Rate – how much of one currency you can buy using another currency. IE: £1 = $1.50.

When lotto began in 1987 the first division prize was worth $1,000,000. It could buy five houses. Today a first division prize of $1,000,000 can only buy.

Market Forces AS AS /10/2015. Contents AssessmentMarket Force Prices Market trends Market manipulations Consumer preference Quality requirements.

Fashion B: Standard Business Ownership and Basic Economics

International Trade Mechanics of Foreign Exchange (FOREX)

EXCHANGE RATES. The Exchange Rate Exchange Rate: the value of one nation’s currency in relation to another is determined by the market forces of supply.

EXCHANGE RATES MK 26. EXCHANGE RATE The price at which one currency can be exchanged for another. e.g. $1= EUR 0.84 (stronger)

Chapter 5: Foreign Exchange Markets and the Balance of Payments

Economic Terms Copy for your notes!. Economy System by which products are produced, distributed, and consumed. Think: MONEY!!!

Economics The student will understand that the production, distribution, and consumption of goods/services produced by the society are affected by the.

Eco 200 – Principles of Macroeconomics Chapter 7: Foreign Exchange Markets and the Balance of Payments.

 If it costs more to make a product, a company has less incentive to produce a product. Your book calls the costs to make a product “input costs.” Any.

CH. 26 ECONOMIC SYSTEMS STANDARD EE 1.1, 1.2, 2.3.

1. Assume that the U.S. economy is in a severe

In a small town, there are 2 industries: an electric company and a gas works electric Town gas.

General Information OPEC Currency The 1973 Oil Crisis

Tutor2u ™ Exchange Rates A2 Economics Presentation 2005.

Exchange Rates Terminology & impact on trade. The ‘Exchange Rate’  Measures the value of one currency in terms of how much of another currency it can.

International Trade 4.5 Balance of Payments ISS International School Mr. Andrew McCarthy.

International Financial Management Learning Goals: Reasons for international business Unique considerations of international business Exchange rates Eurocurrency.

THE GLOBAL ECONOMY. FINANCING INTERNATIONAL TRADE Markets exist everywhere there is supply & demand There are markets where dollars can be exchanged for.

14-1 The Nation’s Sick Economy. Economic Troubles on the Horizon How did diminished demand affect farmers and businesses in the 1920s? How did falling.

SS7E6 The student will explain how voluntary trade benefits buyers and sellers in Southwest Asia (Middle East)

1 Objective – Students will be able to answer questions regarding foreign exchange. SECTION 1 Chapter 38- Foreign Exchange © 2001 by Prentice Hall, Inc.

Economics. Economic Basics Vocabulary: Economics: Study of how people meet their wants and needs Scarcity: Having a limited quantity of resources to meet.

Foreign Exchange (FOREX) The buying and selling of currency – Ex. In order to purchase souvenirs in France, it is first necessary for Americans to sell.

Copyright © 2009 Pearson Addison-Wesley. All rights reserved. Chapter 6 International Trade, Exchange Rates, and Macroeconomic Policy.

Effects of Inflation explain the effects of inflation on households and firms explain the effects of inflation on growth and trade.

I like your computer!!! It’s a new Mac!!! I bought it on line and it’s fromHolland Ohh!!My ipod is made in China!!!!... Do you know that goods of the same.

Trade Created by Danielle Ruff Cartersville Elementary School Third Grade.

© Thomson/South-Western ECONOMIC EDUCATION FOR CONSUMERS Slide 1 Consumer’s Role in the Economy Objectives: By the end of class, students will be able.

Foreign Exchange Markets, ECO Money & Banking - Dr. D. Foster Purchasing Power Parity, and Real Interest Parity.

External Sector Econ External Sector How is a country linked with other countries in the global world? 1)There are exchange of Goods and Services.

AS Economics PowerPoint Briefings 2007 tutor2u ™ tutor2u ™ Exchange Rates.

Review 10.1 Exchange RATES.

10.2 Exchange rates, the rate of interest and trade

Foreign Exchange Markets

Presentation transcript:

18/08/2015 Agricultural Economics – Exchange Rates AS90651 Explain how market forces affect supply and demand of primary products (4 external credits)

18/08/2015 Summary New Zealand is the furthermost country from the rest of the world ( i.e. the Northern Hemisphere) New Zealand is the furthermost country from the rest of the world ( i.e. the Northern Hemisphere) And is quite small And is quite small This means that as a country, our economy depends on the needs and wants of other countries This means that as a country, our economy depends on the needs and wants of other countries

18/08/2015 A High New Zealand Dollar When the New Zealand dollar is valued highly against the US dollar then: When the New Zealand dollar is valued highly against the US dollar then: Imports are cheaper into the country. This is because we can get more for our money. Imports are cheaper into the country. This is because we can get more for our money. Exporters don’t get as much money as the people who buy their products can not buy as much, so they don’t. Exporters don’t get as much money as the people who buy their products can not buy as much, so they don’t.

18/08/2015 What this means for farmers Fertiliser, tractors and other machinery imported into the country cost less so they could buy more Fertiliser, tractors and other machinery imported into the country cost less so they could buy more They don’t make as much money as their products (wool etc) aren’t worth as much They don’t make as much money as their products (wool etc) aren’t worth as much Overall farmers prefer to have a low NZ dollar Overall farmers prefer to have a low NZ dollar

18/08/2015 A Low New Zealand Dollar When the New Zealand dollar is valued low against the US dollar then: When the New Zealand dollar is valued low against the US dollar then: Imports are more expensive to get into the country. This is because we get less for our money. Imports are more expensive to get into the country. This is because we get less for our money. Exporters earn more as the people who buy their products can buy more, so they do. Exporters earn more as the people who buy their products can buy more, so they do.

18/08/2015 What this all means Yesterday the $1NZ was worth $0.615US Yesterday the $1NZ was worth $0.615US A few months ago $1NZ was worth $0.71US A few months ago $1NZ was worth $0.71US This is good for farmers as their products earn more money This is good for farmers as their products earn more moneyWorksheets

$NZ vs $US over last 10 years 18/08/2015