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Chapter 7

Acceptability: Accepted as such by a group of people. Scarcity: there is a short supply of a product, causing the product to become more valuable. Durability: An item will not easily spoil or become damaged. Divisibility: Divide something into smaller units. Portability: Small enough item that people can carry around easily.

3 Main Uses Of Money 1) Measure of Value-tells you what you are buying is word 2) A Medium Of Exchange-Money works only if people are willing to trade goods or services for it. 3) Savings Mechanism-Some people save gold because they believe it will hold value in the future.

Currency is the form of money used by a specific country or region

Currency Exchange Rate is the rate at which one's country currency can be traded for another country's currency.

Hard Currency: Currency that can be exchanged for other currencies at uniformities in financial centers around the world.

Soft Currency is an unstable currency that is not exchanged at major financial centers.

Currency Value Fluctuation is the change in value of one country's currency when it is traded for another country's currency.

Compensate: Power people are likely to buy something to make up for a loss.

Risk is the possibility of loss when there is uncertainty associated with a risk present in day to day buying and selling processes between companies.

Exchange Rate Risk: Occurs when the currency exchange rate fluctuates as a transaction take

Transaction Risk: A risk associated with a buyer making installment payments on a purchase.