If all countries had the same monetary units, a difficult problem of international trade would be solved. One country’s money is not usually good in (1)_________________, however, and it is necessary to have a system for (2)_____________ the currency of the buyer into (3)_______________ of the seller. Bankers handle this by doing (4)_______________ is called buying or selling foreign exchange.

When an exporter sells his goods to a merchant in a foreign country, he makes (5)____________________ a bill of exchange for the merchandise. The bill of exchange looks (6)___________________ a common bank check. The exporter sends this bill to his bank and receives his money. (7)______________________, the exporter receives payment in his own currency.

The exporter’s bank sends the bill of exchange to (8)__________________ branch bank which notifies the (9)___________________ who pays the bill in his currency. The branch bank keeps his money and uses it to pay future (10)_____________________ of exchange presented by merchants in that country who have goods to export.