International Trade and Finance.

Exam #3 Review:

Chapter 10:

· Balance of payment statements

· Know all the components of the balance of payment statements

· Balance of international indebtedness

· Know the debit and credit transactions of the balance of payments.

· Which is debit and which one is credit

· What determine the US balance of trade

· Essay: How do we measure international investment position of the US?

· Essay: How did the US become the net debtor so quickly?

Chapter 11:

· What happened to the international merchandise transactions (trade) if the US dollar is appreciated or depreciated against other currencies?

· What depreciation is and what appreciation is?

· Know the differences between the spot market and the forward market?

· What is spot market

· What is forward market

· How do you prevent the loss and remove the risks of a foreign currency transaction?

· Essay: How do you trade on the future market?

· Essay: Differences of trading between in the future market and the forward market?

Chapter 15:

· Study Manage floating exchange rate system.

· What happens to the US dollar if the inflation of the US and inflation in a foreign country are different?

· Which exchange rate system does not require monetary reserves?

· Under the floating exchange rate system, if import and exports increase or falls, what happens to the dollar value?

· What happens to the balance of trade when the currency is appreciated or depreciated?

· Essay: difference between current pect and adjustable pect exchange rate.

Bonus question about the video that wi will finished on monday.