Currency Exchange
One of the first things that strike Americans traveling or doingbusiness in Israel is the exchange rate between the U.S. Dollar and the NewIsraeli Shekel. Of course, most are extremely happy when they leave thelocal exchange office or bank with a large wad of bills where theypreviously had but a few. This is because the current rate of exchangebetween the dollar and the shekel is 4.48 NIS per one dollar. Unfortunately, this exchange does not necessarily mean that you canbuy more in Israel. Take, for example that one wishes to purchase thelatest souvenir t-shirt, say "I got stoned in Gaza."
In actuality, however, theprice is equivalent to just $20. Now, of course it isnormal to salivate over such a beauteous find. This isbecause, although 183,140 Rupiah may sound like a lot, it can really buyonly about $20 dollars worth of goods. Whoa, doggy! That seems like a lot. For this reason, it becomes clearthat understanding the real economic factors that affect import/exportactivities is far more complex than mere currency exchange. Thus, one can see that in most markets it is not the amount of aparticular currency that matters, but just how much that amount actuallybuys in the marketplace. Thishinges on many complex factors, including (foremost) the economic health ofeach country involved. For example, if one were importing the Gaza t-shirts, they would be of a relatively normal price after the cost isconverted to dollars. However, if the cost of the goods is relativelyinexpensive compared to comparable goods in the importing country, theimport cost will be low, as well as the price that will be charged to theconsumer (assuming there are no trade restrictions or tariffs involved). However, upon asking theprice of this apparel gem, one's mouth may soon revert to its formerlyparched state (completely normal in Middle-Eastern climes). What affects the price of the product as far asmarket fluctuations is the real value of the currency exchanged. In short, there is much more to understanding how currency exchangerates affect the price of goods being imported or exported. Especiallywhen the shopkeeper grandly announces that the item will cost you 89. This means that if the overall price of goods isexpensive in a given country, compared to the country one is importing to,the price of the item will be expensive to import and expensive for theconsumer to buy.
Common topics in this essay:
NIS Whoa,
Israeli Shekel,
,
currency exchange,
|
Acceptance Essays
