Chapter 12 LECTURE NOTES

B. An American export transaction is explained below. 1. U.S. firm is selling $300,000 worth of computers to British firm. 2. Imagine the exchange rate is $2 = 1 Br. pound, so the British firm must pay 150,000 pounds. 3. The British firm will draw a check on its deposit at a London bank for 150,000 pounds, and will send it to the U.S. exporter. 4. ................
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