Domestic Markets
-a country's own market
-own specific currency
-ex: US trades within itself through the dollar
International Markets
-exchange rate: rate at which one country's product is worth a certain amount of another country's currency
Competitive Markets
-large number of producers compete with each other to satisfy the wants and needs of a large number of consumers
-Linkages to all domestic and foreign prices: where the market prices or exchange rate of a currency is an unusual price and links domestic prices with foreign prices; allows consumers in one country to translate prices of foreign goods
Example: America and Japan
-if demand of certain products increase in the US, the dollar price of yen will amso increase.
-If income increases in the US and people decide to buy more Japan products, demand for yen will increase
-If Japan demanded more goods from US, the yen value would decrease; dollar value appreciates in relation to yen
No comments:
Post a Comment