Currency Effect on Trade Review

Curated and Reviewed by Lesson Planet

For about the first six minutes Sal reviews the hypothetical global trade scenario from the last video in detail, changing a few numbers to make for a cleaner example. He continues the scenario to demonstrate how the natural ups and downs of currency value (based on supply and demand) will eventually balance to the point where both countries are importing and exporting the same value. Of course, this perfect-world hypothetical isn't something Sal suggests is happening, and he hints at government intervention in a floating exchange rate make this an impossible notion.

9 Views 4 Downloads

Concepts

trade imbalance, trade, depreciation, supply and demand, currency exchange, exchange rate

Show More Show Less

Additional Tags

price of goods, trade imbalance, exchange rate, supply and demand, currency exchange, appreciation, depreciation, social studies

Show More Show Less

Resource Details

Grade

11th - Higher Ed

Subjects

Social Studies & History