BP D Vocabulary

Complete each sentence with a word or phrase from the box.

currency	equilibrium point euro
■ investors	overseas sterling
swap	zone

A is the kind of money used in л country.

Tho currency used in Italy, Trance and Greece is the

.................. is another name for the UK's

pounds and pence.

A................... is an area.

Being................... means you are not in your

own country.

' If you're not satisfied with what you've bought, you can it for something else.

.................. arc people or companies that lend

money to companies in order to make a profit.

The is the price that sellers are happy to sell at and buyers are happy to buy at.

Reading 2

Exchange rates

The l'h has sterling, the l'SA has dollars and Russia has the rouble. Almost every country h.is its own currency. Some countries in an economic /one share a currency, for example the 1A European countries that share the euro, but this is quite rare. If I live in a Eurozonc country and I want to buy something from the ГК. I must buy- it using I К sterling To do this I need to exchange my euros for sterling The amount of sterling I can swap lor each euro depends oil the i \chuni:t rule.

For example, if the exchange rate is i 1 €1.50 and the camera I want to buy is worth * 1 <н». then tobuy the camera 1 must spend 1<>0х 1 5 €150. Similarly, if someone in the ГК wants to buy something from a Eurozone country, they must exchange their sterling for euros. If the computer tliey want ю buy costs €500, then they must spend 500 x 0.75 = VA75.

Most exchange rates, however, do not stay the same. They arc changing all the time Imagine that a few days later the exchange rate changes to VI €1 15 Thi.s would make the camera cheaper for me. but the computer more expensive lor the buyer in tin ГК. In other words, sterling has got weaker against the euro ami tin- euro has got stronger against sterling.

HatmiHiR Gw>4«to Crenemift U я ■ IS 95

Where does demand for a currency come from? Let's take the euro, for example. Exports from the Euro/one need to 1ч- paid for in euros. This means the buyers of those exports need to buy euros to make their purchases. So the demand for euros increases. Also, investors from outside the Euro/one may want to invest their money there because they think they will make a profit. To do this, they must buy euros, and again the demand for euros increases. The supply of euros on the international money markets comes from people who want to sell euros. If people want to buy imports from countries outside the Eurozone. or if they want to invest in countries outside the Euro/one, they must sell their euros to buy other currencies. So the supply of euros increases.

A change in the exchange rate of a currency can have a big impact on the economy. For example, it can have a big impact on the economy's balance of payments. As we saw in the example earlier, when a currency gets stronger, imports become cheaper. Hut at the same time, exports to overseas customers get more expensive. This will probably mean that more money will tlow out of the economy than in.

Дата добавления: 2015-10-30