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Ch 14: Foreign Exchange and the Balance of Payments

About This Chapter

Watch these video lessons on foreign exchange and the balance of payments to learn about international currency issues. Take the quizzes that follow each lesson to test your knowledge of foreign exchange and the balance of payments.

Foreign Exchange and the Balance of Payments

If you've ever traveled internationally, or even if you've done online shopping through a foreign seller, you're probably aware of the fact that not all currencies are valued equally. Obviously, the impact of foreign exchange rates goes a lot further than the cost of that rare Turkish Star Wars poster from an Australian eBay seller. These video lessons help explain why and how an understanding of foreign exchange and the balance of payments is so important in macroeconomics.

These videos will help elucidate concepts like exchange rates and what factors make them change. Additionally, you'll learn how international currency changes can impact imports and exports. You'll also be introduced to the concept of supply and demand as it relates to currency. You're probably familiar with the supply and demand concept related to goods and services, but did you know that it impacts currency as well?

Finally, these lessons will explore the idea of trade deficits and surpluses. You've probably heard or read about these terms on the news or in political debates and speeches, but with these lessons, you can learn more detailed specifics relating to these concepts, as well as how to achieve trade balance.

International economics can be confusing, but these videos should help make things a lot easier to understand. With a better understanding of currency exchange and foreign trade, global economics should become less of a mystery. Thanks for watching!

8 Lessons in Chapter 14: Foreign Exchange and the Balance of Payments
Foreign Currency Exchange: Supply and Demand for Currency

1. Foreign Currency Exchange: Supply and Demand for Currency

In this lesson, you'll learn why money from different countries has different values of exchange. We'll cover the supply and demand for currencies and how changes in supply and demand can affect the exchange rates between currencies.

Exchange Rate: Determination and Conversion Across Countries

2. Exchange Rate: Determination and Conversion Across Countries

Understand what exchange rates are and the different types that can be used by governments and countries. See how they operate and how the conversion process works across countries.

Currency Appreciation & Depreciation: Effects of Exchange Rate Changes

3. Currency Appreciation & Depreciation: Effects of Exchange Rate Changes

Find out how changes in the exchange rate can affect the economy and your own individual situation. Discover how these currency changes can increase and decrease your purchasing power and standard of living.

How Fiscal and Monetary Policies Affect the Exchange Rate

4. How Fiscal and Monetary Policies Affect the Exchange Rate

Discover how fiscal and monetary policy can affect the exchange rate and ultimately the amount of money it costs you to buy goods and services. Find out the three paths that both fiscal and monetary policy can travel to impact the exchange rate.

How Currency Changes Affect Imports and Exports

5. How Currency Changes Affect Imports and Exports

Learn about how currency changes can affect imports and exports. Find out how this affects you. Discover what happens when a dollar is strong compared to other currencies and what happens when it is weak.

Achieving Trade Balance: Trade Deficit and Surplus Examples

6. Achieving Trade Balance: Trade Deficit and Surplus Examples

Find out what trade balance, trade deficit, and trade surplus are. Learn about some recent examples that help clarify trade deficit and surplus. Explore what countries have a surplus and what countries have a deficit.

Balance of Payments: Current Account & Measuring Foreign Trade

7. Balance of Payments: Current Account & Measuring Foreign Trade

Find out what the current account is and the four main foreign trade components that it is comprised of. Similar to your bank account, learn how the current account is measured and what a deficit and surplus mean when talking about this economic indicator.

Balance of Payments with Financial Accounts: Measuring Foreign Trade

8. Balance of Payments with Financial Accounts: Measuring Foreign Trade

Learn about the balance of payments and the two key components that make it up. Discover what the financial/capital account is and how it relates to foreign trade and surpluses and deficits.

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