I know the general difference of a Planned economy and a market economy - that is a planned economy is state planned rather than dependant on supply and demand ... but my question has to do with currency.
Countries with centrally planned economies (or CPE) have currency which is not internationally exhangeable right? Such currency existed in the USSR. Yet these nations did/do trade with countries with market economies.
How does this work out? Is money invovled or is it just a trade of goods and services, i.e. - Give me 100 cars and I'll give you [I]x[/I] amount of timber.
If money is invovled, how does it play out? Since the country with a CPE has currency which is not exhangeable. The USSR for example did international business with other CPE nations along with countries with a market economy ... England for example bought Soviet cars.
In a nutshell, how does a country with no internationally exchangeable currency do international trade?
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