Principles of Macroeconomics / Unit 13 MAC 1201 short lesson, about 20 seconds
An Exchange Rate Is a Price
Captions available
The idea
An exchange rate is the price of one currency in another, so supply and demand apply to it as to any price. The foreign exchange market is the largest financial market in the world.
In practice
Not every country has its own currency: some adopt another's, and some share one.
Where people slip
Most of the trading is financial rather than payment for goods, which surprises people.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
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