AP Macroeconomics Unit 6
AP Practice
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Just some useful notes for the AP Macro... WIP
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7 Terms
(6.1) Key takeaways for balance of payments accounts
CA + CFA = 0
Money in is credit; money out is debit
Net exports = trade balance = exports minus imports (part of CA)
(6.2) Exchange Rates
(6.3) The Foreign Exchange Market
(6.4) What happens in a paired exchange rate example?
One will appreciate and the other will depreciate since each is relative to each other. See image for example:
(6.5) Effects of currency appreciation and depreciation on the ForEx market?
An appreciated currency leads to more expensive exports and decrease in aggregate demand
A depreciated currency leads to a less expensive exports and increase in aggregate demand
(6.6) Memorize…
(6.6) How is the movement of financial capital reflected?
The movement of financial capital is reflected by:
A changing balance in the CFA
A shift of the supply of loanable funds
