foreign exchange rates (1)

first , how does trade places? if i buy orange from Florida or ammonia from Chicago , I naturally want to pay in dollar . Also , the grower and the ammonia producer except to be paid in dollars ; after all , their expenses and living costs are settled in dollars . Within a country , economic transaction seem simple .
if,however, I wish to buy an English sports car directly , matters are more complicated . I must ultimately pay in British money , or what is called " pound sterling " rather than in dollars. Similarly , an Englishman must somehow get dollars to an American producer if he wants our merchandise . Most Americans have never seen a British pound note . certainly they would accept pounds only if they could be sure of converting them into American dollars.
Clearly , therefore, exports and imports of goods between nations with different units of money introduce a new economic factor : the foreign exchange rate , giving the price of the foreigner is unit of money in terms of our own .
thus, the price of a British pound was in the general neighborhood of $2.00 in the late 1975.There was also a foreign exchange rate between American money and the currencies of each and every country: 40 cents to the German mark 23 cents for the french franc ; less than 1/7 cent for an Italian lira ;1/3 cent for the japanese yen (or,alternatively ,300 yen to $1) .