1. Moat economies in the world wore closed until very recently.

2. Open economies exchange exports and imports with each other.

3. Importing products will always make the local economy shrink.

4. Only the producer benefits from an open economy.

5. If you go abroad for a holiday, you create an invisible export for your country.

6. When exports earn more money than imports, there is a trade surplus for the economy.

Exchange rates

The UK has sterling, the USA has dollars and Russia has the rouble. Almost every country has its own currency. Some countries in an economic zone share a currency, for example the 13 European countries that share the euro, but this is quite rare. If I live in a Eurozone country and I want to buy something from the UK, I must buy it using UK sterling. To do this I need to exchange my euros for sterling. The amount of sterling I can swap for each euro depends on the exchange rate.

For example, if the exchange rate is £1 = ?1.50 and the camera I want to buy is worth £100, then to buy the camera I must spend 100 x 1.5 = ?150. Similarly, if someone in the UK wants to buy something from a Eurozone country, they must exchange their sterling for euros. If the computer they want to buy costs ?500, then they must spend 500 x 0.75 = £375.

Most exchange rates, however, do not stay the same. They are changing all the time. Imagine that a few days later the exchange rate changes to £1 = ?1.45. This would make the camera cheaper for me, but the computer more expensive for the buyer in the UK. In other words, sterling has got weaker against the euro and the euro has got stronger against sterling.

But what makes the exchange rate change? To understand this, just think of the exchange rate as the price of the currency. Just like any other commodity, the price of a currency is decided by supply and demand in the market. The rate set will be the equilibrium point where supply and demand meet.

Where does demand for a currency come from? Let's take the euro, for example. Exports from the Eurozone need to be paid for in euros. This means the buyers of those exports need to buy euros to make their purchases. So the demand for euros increases. Also, investors from outside the Eurozone may want to invest their money there because they think they will make a profit. To do this, they must buy euros, and again the demand for euros increases. The supply of euros on the international money markets comes from people who want to sell euros. If people want to buy imports from countries outside the Eurozone, or if they want to invest in countries outside the Eurozone, they must sell their euros to buy other currencies. So the supply of euros increases.

A change in the exchange rate of a currency can have a big impact on the economy. For example, it can have a big impact on the economy's balance of payments. As we saw in the example earlier, when a currency gets stronger, imports become cheaper. But at the same time, exports to overseas customers get more expensive. This will probably mean that more money will flow out of the economy than in.

Переведите на английский язык:

1.    В течение всей мировой истории люди и страны торговали друг с другом. В современном мире экономика считается открытой, когда страна импортирует и экспортирует товары и услуги.

2.    Экспорт и импорт товаров определяется как «видимый» в отличие от «невидимого» экспорта и импорта услуг.

3.    Торговый баланс является составной частью платёжного баланса. Если объём импорта превышает объём экспорта, страна имеет торговый дефицит. Если ситуация противоположная, страна имеет положительное сальдо торгового баланса.

4.    Почти каждая страна в мире имеет свою национальную валюту Некоторые страны используют общую валюту, например, страны-члены Европейского Союза. Все 13 стран используют евро.

5.    Обменный курс — это цена валюты. Как и любая цена, она определяется спросом и предложением на рынке.

6.    Валютный курс — это равновесие между спросом на валюту и её предложением.

7.    Изменение обменного курса валюты всегда имеет воздействие на экономику страны. Например, если курс валюты растёт, товары этой страны становятся дорогими, спрос на них за рубежом падает. В результате может уменьшиться объём экспорта страны.

Exchange rates