What you’ll learn to do: describe the impact of currency valuation on business operations in global markets

Zimbabwe $100 trillion dollar banknote

Have you ever gotten change back at a store and later discovered that among your U.S. currency was a Canadian quarter or nickel? It looks almost like its U.S. counterpart, and feels almost like its U.S. counterpart—but something about it is different. The value of that Canadian coin may very well differ from its U.S. counterpart, depending on the exchange rate that day.  Imagine carrying this $100,000,000,000,000 Zimbabwean banknote in your wallet . . . feeling pretty rich? Well, don’t go shopping for a new sports car quite yet! If you were to take this $100 trillion banknote to your local banker and ask for it to be exchanged into U.S. dollars, you would walk out of the bank with about $276,000,000,000 ($276 billion dollars). Now, that’s still more money than some countries’ GDP, but it’s a far cry from $100 TRILLION! Why is that? The answer is currency valuation, which is the topic for this section of our module.

Learning Activities

The learning activities for this section include:

• Reading: Currency Valuations and Exchange Rates
• Self Check: Currency Valuation

Take time to review and reflect on this activity in order to improve your performance on the assessment for this section.