As you may remember from the "Ship's Hold" lesson, different nations have different types of money. These "local currencies" have different names and very different values. The local currency in the United States is the dollar. When people buy things in South Korea they need to use their local currency, the WON.

The picture above is of a 5,000 won note. Someone living in Korea could buy a compact disk, rent a video game, get a haircut, or buy a hamburger with won notes like this one - just as you can with dollar bills in the United States.

But when a merchant in South Korea wants to buy American apples or if a Korean tourist wanted to visit Washington, D.C., these people must use dollars. Likewise, if a merchant in the United States wanted to buy Korean rice, or if a American tourist wanted to visit Seoul, South Korea, these people would need to obtain Korean won. To get dollars for won, or to get won for dollars, you must buy the currency in what is called a "currency exchange."

To continue with this lesson click the "Ahead" button below.