Global Economy Kelsey Winchester 3 rd block The balance of trade is the difference between a country’s total exports and total imports. This is important because countries try to keep it in balance and also it is important so you will know where your country stands with other countries.
The exchange rate is the value of a currency in one country compared with the value in another.
Examples of exchange rates
Mexico- 1 US Dollar = 14.57957 Mexican Peso
Russia-1 Russian Rouble = 0.02867 US Dollar
Japan- 1 Japanese Yen = 0.01108 US Dollar
Factors affecting exchange rate
Balance of Payments
Geography is important when doing business internationally because the location, climate, terrain, seaports, and natural resources of a country influence business activity.
For example, a nation with many rivers or ocean seaports can easily ship products for foreign trade.
Cultural influences is important when doing business internationally because what is appropriate and what is not is different in every country. In some societies, hugging is an appropriate business greeting, and in other a handshake is in custom.
Culture Factors: language, religion, values, customs, and social relationships.