DATE: 2/08/19 PERIOD: VI

CLASS: XI DURATION: 35 Min

SUBJECT: BUSINESS STUDIES

SUB SUBJECT :COMMERCE
Q.What is currency?
Ans. Money that is used in A
particular country.

Q. Why do we need currency?

Ans. To purchase goods and
services.

Q. If you want to purchase

something that is not available in
your country then what would you
do?
Ans. Try to purchase from another
country where that product will be
available.

Q. If you are buying something from

another country then in what terms
the payment would be made?
Ans. In foreign currency.

Q. On which basis a person can get

foreign currency?
Ans. Problematic.
Ans. Direct or Indirect tax.

Q4. What is the reason of charging tax by

the government?
Q. What do you find in your hands?
Ans. Money.

Q. What is money?
Ans. Anything which is acceptable as a
medium of exchange of goods and
services.

Q. Can you buy something from the

money which you have in your hands?
Ans. No

Q. If you cannot buy goods and services

than how can we call it money?
Ans. Problematic
I have 4 type of chocolates-

Q. What would you liked to purchase

from these?
Ans. Expected

The price of the chocolate is only One

Indian Rupee
Let's begin the auction.
Highest bidding will be considered.
Q. What was the Indian Rupee Worth in
this activity?

=
Ans. 1 Indian Rupee=3 Lira as
per highest bidding.

Q. What was the worth of lira?

Ans. 3Lira =1 Indian Rupee

Q. How the actual values of

international exchange are determined?
Exchange Rate is the price or value of
one nation's currency in terms of
another nation's currency.

It refers to the conversion of values of

international currencies.
“The process of converting currency is
known as foreign exchange”
Evaluative Questions-
Q. A person from Japan can purchase
goods from India with his currency
Yen?
Q. Foreign exchange is also known
as……?
Q. The process of converting currency
is known as……?
Q. You are a citizen of India and your one
friend lives in China who is purchase new
house and need your help in terms of
money. How will you help him?
Ans. By transferring money from India to
China.

Q. How can you transfer money?

Generalization-The first function of
foreign exchange is Transfer function.

This function performs the transfer of

purchasing power between two countries.
This transfer of purchasing power is
affected through variety of credit
instruments like-foreign bills, bank draft
Testing-
Q. Who performs the function of foreign
exchange?
Q. Through which instruments transfer
function can be done?
Q. If Pakistan wants to purchase
tomatoes from India but doesn't have
proper money for payment now what
option it can adopt?
Generalisation-
Provision of credit-
Another function of foreign exchange is to
provide credit to the countries to promote
foreign trade.
“Foreign market provides credit on the
basis of the transactions and the value of
their economy”
Testing-
Q. What is the purpose of providing credit
to the countries?
Q. What period is given to exchange
foreign bills?
Q. If a country invest it's currency to get
foreign currency what type of risk it can
face?
Ans. Fluctuations in the value of
currency.

Q. How this risk can be overcome by

foreign exchange?
Generalisation-
Another function of foreign exchange is
Hedging

“Hedging is the process of avoiding risk

by providing various tools to the
country”
So we can say that to protect the risk
of change in the value of currency
foreign exchange market provides the
tool by filling an agreement.
Testing-
Q. Explain hedging in your own words?
Q. Explain the situation in which
hedging is needed?
Summary-
Closure-
So today we have discussed about
foreign exchange that it is A Process
through which we get the amount of
another country's currency for foreign
trade.it generally performs 3 functions.
Recapitulative question-
Q. Explain two primary functions of
foreign trade?
Q. How foreign exchange can promote
trade?
Home assignment-
Q. Define foreign exchange in your
own words?
Q. Explain it's functions briefly.
Thank you