Quiz2.W5 Flashcards
_______ refers to money in any form when in actual use or circulation as a medium of exchange
Currency
History:
- Metals were used as symbols to represent value stored in the form of _______ (e.g., silver, gold, bronze, copper)
- In pre-modern China, the need for credit and for a medium of exchange that was less physically _______ than large numbers of copper coins led to the introduction of paper money
commodities / cumbersome
- Paper money _________, which was risky
- By 1900, most of industrializing nations were using some form of gold standard, with paper notes and silver coins functioning as the ________
reduced the need to transport gold and silver / circulating medium
Currency examples?
- United States Dollar: USD ($)
- European Union Euro: EUR (€)
- United Kingdom Pound sterling: GBP (£)
- Chinese Yuan: CNY (¥)
- Korean Won: KRW (₩)
- The four currencies are the _______ in the world’s foreign exchange market
- They make up the basket of currencies for the circulation of the value of the IMF’s Special Drawing Rights
most traded currencies
________ were first ______ in 1772 by the London Credit Exchange Company for use in 90 European cities
Traveler’s checks / issued
In 1874, Thomas Cook was issuing “________” that operated in the manner of traveler’s checks.
circular notes
_______ was the first company to develop a large- scale traveler’s check system in 1891, and is still the largest issuer of traveler’s checks today by volume.
American Express
Thomas Cook:
- British businessman
- Pioneer of modern mass tourism
- Organized a train ______ for around 500 passengers to attend a temperance meeting in Loughborough, England.
- This event is considered the birth of modern tourism.
- Cook founded the travel agency “Thomas Cook & Son” in 1841.
excursion
He introduced several innovations to the travel industry:
- the concept of package tours
- fixed-price inclusive holidays
- the use of printed timetables and itineraries
- negotiated discounts with rail companies and hotels
Revolutionized the travel industry, making travel more ______ and ______ for the masses
accessible / affordable
Thomas Cook Group plc declared ________ in 2019
bankruptcy
Between the 1950s and the 1990s, traveler’s checks became one of the main ways that people took money on vacation for use in foreign countries without the risks ________ carrying large amounts of cash
associated with
- Traveler’s checks are sold by banks and financial specialist to customers for use at a later time
- They are ________ that could be exchanged for local currency at banks, hotels, and other businesses around the world.
pre-printed, fixed-amount checks
- Upon obtaining _______ of a purchased supply of traveler’s checks, the _______ should immediately write his or her signature once upon each, usually on the check’s upper portion.
- This helps to protect them if they are stolen
custody / purchaser
The purchaser will have received a ______ and other documents that should be kept in a safe place
receipt
- Traveler’s checks can usually be replaced if lost or stolen
- Traveler’s checks quickly gained popularity among travelers due to their security and convenience.
- They were widely accepted at hotels, restaurants, shops, and
other _______ around the world, providing travelers with a ________
establishments / reliable form of paymen
The use of traveler’s checks has been in decline since the 1990s as _________, such as credit cards and debit cards are more widely available, easier, and more convenient
alternatives
- The price of currency fluctuates just like that of any other _______.
- An exchange rate is the price at which two currencies can be exchanged against each other
- This is used for trade between the two currency zones
commodity
A _________ is the ______ of the relative value of a currency unit against the unit of another currency in the foreign exchange market
currency pair / quotation
The quotation EUR/USD 1.3533 means…
- 1 Euro is able to buy 1.3533 US dollar.
- This is the price of a unit of Euro in US dollar
- __________ are usually very stable and they hardly fluctuate at all.
- For the __________ for local currency, banks at airports, air terminals, or main train stations, are often available even in the late or early hours.
- European currencies
- exchange of foreign currency
- Avoid leaving any foreign country with a ________ of its currency
- _______ can normally be passed in the next country, but leftover foreign change is not usable: try to get rid of all coins before crossing the border.
- sizeable chunk
- Surplus bills
- Retail ______ that are exempt from the payment of certain local or national taxes and duties
- Requirement that the goods sold will be sold to travelers who will take them out of the country
outlets
- ________ are often found in the international zone at international airports, sea ports, and train stations
- Goods can also be bought duty-free on board airplanes and passenger ships
Duty free shops
- The world’s first duty-free shop was established at _________ in 1947
- The Irish Parliament ruled that any goods brought directly into Shannon Airport from abroad would not be liable to duty or local taxes
Shannon Airport, Ireland
It was a historic decision that paved the way for the __________ of duty-free shopping throughout the world
phenomenal growth
Some _______ grew as duty-free shopping destinations *Examples include Saint Martin and the US Virgin Islands in the
Caribbean, Hong Kong, and Singapore
locales
Generally, goods are free of duty and tax _____ on imports for sale anywhere in the shopping destination
levied
_________ may pay inventory / business or other taxes, but their customers usually pay none directly
Merchants
Duty free goods mean goods sold at prices lower than their _________ in the normal market at home
equivalent
Some of the __________ are: liquor, cigarettes, cigars, perfumes, cameras, watches, electronics, and many other items for daily use
popular duty-free items
When buying them at airport shops, you may be asked to show your ticket or boarding pass to __________ or a transit passenger
prove you are departing
In many cases, your purchases must ________ until you leave the area
remain in bond
You are given a receipt for your purchase but not the items, which are put either into the “______” window at the airport (where you collect them), or directly aboard your plane
in bond
You may also have a chance for a duty free purchase during an international flight, though the items sold are limited in _______
variety and quantity
Most tax regimes also allow travelers entering a country to bring in a certain amount of goods for personal use without paying tax on them, the so-called _______
duty-free allowance
This is because it is not economically _______ to collect the small amounts of tax involved, and it would be inconvenient to the passengers
justifiable
Significant savings?
- Duty-free shopping can offer substantial savings compared to retail prices, primarily due to the lower taxes and duties levied on goods sold in duty-free shops.
- When travelers purchase goods in duty-free shops, they are typically exempt from certain local taxes and import duties that would otherwise be applied to the same products purchased in traditional retail outlets.
Significant savings?
- These tax exemptions can result in significant price
reductions, especially for high-value items such as
electronics, luxury goods, alcohol, and tobacco products. - The extent of the savings can vary depending on factors such as the destination country’s tax rates, currency
exchange rates, and the specific products being purchased. - However, in many cases, the savings can be substantial, particularly for goods that are heavily taxed in the traveler’s home country
Wider selection of products?
- Duty-free shops often offer a more extensive selection of
products compared to domestic retail outlets, including exclusive items or brands that may not be readily available in the traveler’s home country. - This broader range of products can include internationally renowned brands, limited edition items, and specialty goods that cater to the diverse preferences and tastes of travelers from around the world.
- In addition to popular categories such as alcohol, tobacco, perfume, and cosmetics, duty-free shops may also stock a variety of other products such as fashion accessories, electronics, confectionery, souvenirs, and travel essentials.
- The availability of ________ or hard-to-find items can make duty-free shopping a unique and rewarding experience for travelers, offering the opportunity to discover and purchase products that may not be accessible through conventional retail channels.
exclusive
Convenience for travelers?
- Duty-free shopping offers a convenient and time-efficient retail experience for travelers, especially those who may have limited time for traditional shopping excursions while on the move.
- Duty-free shops are typically located in international transportation hubs such as airports, seaports, and border crossings, making them easily accessible to travelers during their journeys.
The ________ of duty-free shops to departure gates and transit areas allows travelers to browse and purchase goods without having to leave the airport or interrupt their travel itinerary.
proximity
This convenience is particularly beneficial for travelers with tight ________ or those who prefer to make last- minute purchases before boarding their flights or ________ on their journeys.
layover times / embarking
_____, in the context of international trade, refers to a tax or fee imposed by_________ on imported goods. It is levied to generate revenue for the government and to regulate the flow of goods across borders.
Duty / customs authorities
_________ can be imposed as a percentage of the imported goods’ declared value, as a specific amount per unit of weight, volume, or quantity, or through a combination of both methods.
Customs duties
Customs duties may vary depending on factors such as the type of goods being imported, their country of origin, their intended use, and any trade agreements or _______ in place between the importing and exporting countries.
tariffs
The purpose of customs duties is to _______, ___________, and __________
protect domestic industries / regulate international trade / generate revenue for the government
________ with duty and tax regulations when shopping internationally is not only a ________ but also an _________
Complying / legal obligation / ethical responsibility
From a legal perspective, customs authorities _______ regulations governing the importation of goods to ensure the collection of applicable duties, taxes, and fees. Failure to comply with these regulations can result in penalties, fines, or legal consequences.
enforce
Ethically, adhering to duty and tax regulations demonstrates respect for the laws and ________ of the host country. It also contributes to fair trade practices by ensuring that imported goods are subject to the same duties and taxes as domestically sourced products, thereby promoting a level playing field for businesses.
sovereignty
Responsible ________ to duty and tax regulations helps preserve the integrity of international trade and supports efforts to combat smuggling, _________, and other __________ that _______ the stability and fairness of global commerce.
adherence / tax evasion / illicit activities / undermine
