34.2 The Exchange Rate
MyEconLab Concept Video
When we buy foreign goods or invest in another country, we pay using that country’s currency. When foreigners buy U.S.-made goods or invest in the United States, they pay in U.S. dollars. We get foreign currency and foreigners get U.S. dollars in the foreign exchange market. The foreign exchange market is the market in which the currency of one country is exchanged for the currency of another. The foreign exchange market is not a place like a downtown flea market or produce market. It is made up of thousands of people: importers and exporters, banks, and specialist traders of foreign exchange, called foreign exchange brokers. The foreign exchange market opens on Monday morning in Hong Kong, which ...
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