Key Takeaways
Lesson Description
Key Takeaways
• Countries benefit from international trade through comparative advantage.
• Exchange rates determine the value of one currency relative to another.
• Currency appreciation and depreciation affect imports and exports.
• Foreign exchange markets determine exchange rates through supply and demand.
• Trade deficits and surpluses influence the balance of payments.
Must Know Models
Foreign Exchange Market
Must Know Vocabulary
Exchange Rate
Appreciation
Depreciation
Exports
Imports
Trade Deficit
Trade Surplus
Current Account
Capital Account
Foreign Exchange Market
AP Exam Focus
• Explain exchange rate changes.
• Draw Foreign Exchange Market graphs.
• Analyze international trade policies.