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Economic Development

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In the trade simulation four key points addressed is that trade is very important to any countries economy. By using a country’s resources such as having rich soil for agriculture or perhaps having the labor quality needed to export goods provides a revenue source for their economy. Another key point is that the goods received from another country can give consumers better choices and competitive prices. As goods are being imported they compete with other manufacturers and pricing can become competitive which is a benefit to all consumers and tax revenue can benefit the overall economy. A greater point in the trade simulation is that it allows the local market to expand into other countries if they offer goods that are not provided to other areas. For instance, if the country produces coffee and exports to another country that cannot produce coffee it is a greater advantage for revenue for the exporting country to provide a good that is not accessible everywhere. The last key point is investment in a particular country. If a country can provide goods to many areas it can lead to greater investments from other countries. For instance, in Africa they can mine for diamonds which is not available in all areas of the world but the good can be purchased by many countries putting a greater investment into property in Africa to sell more of that good. The investment brings revenue into the area by providing more stability for their citizens along with a steady economy.

The influences that affecting foreign exchange rates according to Lowery (2008) interest rates, economic health, foreign trade, official interventions and shocks and speculation. As interest rates rise in a country it can also cause their monetary value to increase which in turn affects the exchange rates. The economic health can affect exchange rates according to Lowery (2208) by “an economy

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