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Topic 10 - Coggle Diagram
Topic 10
Where are you most likely to come across a bureau de change?
You are most likely to find a bureau de change near places with lots of tourists (e.g. airports, ship ports...) This is because they earn when tourists change their currency for traveling.
The import and export businesses within an economy are more commonly known as what?
International trade
How do companies that buy and sell currencies make a profit?
Companies that buy and sell currencies earn profit by decreasing the true value of a currency and by taking its difference between the actual currency. For instance, today, £1 = €1.20 so, a bureau de change will allow you to exchange £1 for €1.10. They have now earnt €0.10.
What is the impact of a strong currency on local business?
Since a strong currency allows imports to be cheap and exports to be expensive, local businesses find it hard to compete with foreign suppliers who are able to sell produce for much less.
What is the impact of a weak currency on local business?
Since a weak currency makes imports expensive and exports cheap, local businesses thrive due to the lack of competition against expensive foreign suppliers (foreign suppliers experience cost-push inflation.)
What is the main aim of the 'Buy British' initiative?
To ensure that British money remains within the British economy to boost businesses and to reduce unemployment.
What is the definition of foreign exchange?
Foreign exchange is a money transaction (in or out of account) via a different currency. For example, a British tourist buying ice-cream with euros; multinational business earning money in a different currency.
What are the 4 main foreign exchange services that banks offer?
To help businesses move large quantities of money to a different currency.
Basic currency exchange - Tourists who wish to exchange their pounds into euros.
Remittances - when people send money to a bank abroad (I send £100 to my family in Spain, bank changes currency.)
When people withdraw money from a foreign bank account in another country.