Principles of Macroeconomics / Unit 18 MAC 1715 short lesson, about 20 seconds
Model Six: The Foreign Exchange Market
Captions available
The idea
One currency priced in another, with demand and supply as in any market. Exports, visitors and foreign asset purchases demand a currency; imports, travel abroad and foreign asset purchases supply it.
In practice
The same market drawn from the other currency's side is its mirror image.
Where people slip
Here both curves often shift together, so the rate's direction is certain and the quantity is not.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
Unlocks
- Nothing yet depends on this.
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