About This Chapter
Foreign Exchange & Trade Balance - Chapter Summary
The lessons in this chapter will show you about foreign currency exchange, including how the exchange rate is determined and the impact of changes in the exchange rates. You'll learn how fiscal and monetary policies influence the exchange rate. Our instructors will discuss achieving trade balance, balance of payments and international banking. After completing these lessons, you should be ready to:
- Describe demand and supply as it relates to currency
- Explain how the currency exchange rate is determined
- Analyze the impact of changes in the exchange rates
- Show how imports and exports are affected by currency changes
- Define trade deficit and trade surplus
- Explain balance of payments
- Identify international banking organizations, including the World Bank, and tell what they do
Our expert instructors have developed entertaining lessons to help you learn, and each includes a quiz that allows you to test your knowledge. There is a written transcript of every lesson, some with links to text lessons that provide additional information. The lessons also include video tags that make it easy for you to go back and review passages that require additional study.
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.
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.
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.
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.
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.
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.
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.
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.
9. The World Bank, IMF & Other International Banking Organizations
International banking and financial organizations exist to encourage economic and financial stability, help facilitate trade, and help with economic development. In this lesson, you'll learn about some of these important organizations.
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Other chapters within the GACE Economics (538): Practice & Study Guide course
- Basic Economic Concepts & Terms
- Scarcity, Choice & The Production Possibilities Curve
- Comparative & Absolute Advantage, Specialization & Trade
- Supply, Demand & Market Equilibrium
- Determining Price in Economics
- Government Issues in Economics
- Business Organization & Decision Making
- Producers & Production in Microeconomics
- Understanding Macroeconomic Equilibrium
- Scarce Economic Resource Markets Basics
- Economic Market Structures
- Basics of Measuring the Economy
- Understanding Economic Growth and Productivity
- Inflation & Adjustment in Economics
- Unemployment Basics
- Understanding Inflation & Unemployment
- Overview of Aggregate Demand & Supply
- Fiscal Policy & Monetary Policy
- Expansionary & Contractionary Gaps
- Money & the Market
- The Central Bank & Monetary Policy
- Overview of Inflows, Outflows & Restrictions
- Personal Finance: Consumer Decision Making
- Personal Finance: Savings & Investments
- GACE Economics Flashcards