Introduction (FIX) Living in today's world, as a global society, we have become more and more connected and continue to do so with each passing year. Individuals all over the world are finding that it has become much easier to transport goods/services from one country to another. The Fundamentals of Exchange Rates Exchange Rates As the basis of the exchange process, exchange rates are one of the most important elements in business, both internationally and domestically. Defined as the rate at which one currency can be converted into another, exchange rates are used by countries to purchase products or services from each other. When examining these exchange rates it is important to note that their two distinct types of rates are used for global trade: nominal and real. The first of these exchange rates, nominal, is the number of units of a given currency that one unit of a given foreign currency can purchase (INSERT CITATION). When using this rate, countries are able to price their currency against each other when trading in the foreign exchange market. This principle, however, is not exclusive to currency trading. Similar to the nominal exchange rate, the real exchange rate uses goods and services instead of currency. Consequently, it is defined as the amount of goods or services that can be exchanged in one country for a good or service in another country. Using this rate, countries are able to evaluate the competitiveness of their goods and services in trade with a given country, making it a key factor for countries trading in the global economy. Since this rate, along with the nominal rate, are constantly in use in the global economy, these rates can vary depending on a number of factors... middle of the paper... SOURCE ERT DOLARE TODAY) This new level was designed in hopes of closing the gap between officers and blacks. market trade, a problem that Venezuela has been fighting for decades. Having such a high differential between the official and unofficial exchange rate has caused many problems for Venezuela, two of the biggest being inflation and shortages of goods. In January this year, inflation rates rose to nearly 56% and the scarcity index reached an all-time high of 28%; and since the exchange rate is fixed, economists argue that this will only serve to perpetuate these problems. (INSERT QUOTE). That said, having just started in March, it is still too early for any real in-depth analysis on this new exchange rate system. Until an adequate period of time has passed, the world will not know whether this exchange rate system can sustain itself and, ultimately, Venezuela..