Crash Course Economics #15
Imports, Exports, and Exchange Rates
Part 1: Key Terms-Match the concept with the letter that corresponds to the correct definition
1. Exports
2. Imports
3. Protectionism
4. World Trade
Organization
5. Exchange Rate
6. Appreciation
7. Depreciation
A. The value of one country's currency relative to the currency from a different
country
B. The practice of limiting the amount of trade and foreign goods to shield local
industries from foreign competition
C. The loss of value of a country's currency with respect to other foreign currencies
D. When individuals or businesses produce and sell goods or services in a different
country
E. When the value of a country's currency increases relative to the currency in a
foreign country
F. When individuals or businesses buy goods or services produced in a different
country
G. Establishes rules of trade between nations to ensure that trade flows as smoothly.
predictably and freely as possible
Part 2: Check Your Understanding- Complete the following
8. What is the difference between a trade surplus and a trade deficit?
9. Will a country's exports increase or decrease if their currency appreciates? Explain your reasoning.
10. Assume a Chinese businesswoman buys Telsa stock on the New York Stock Exchange. Would this be recorded in
the current account or the financial account for the United States? Explain your reasoning
.
Part 3: Article Analysis-Read the article excerpt and complete the following
"In March, the COVID-19 pandemic became more severe, affecting overall economies as well as exchange
rates. Reduced global demand for commodities such as oil has sent
commodities prices crashing: Mexico and
Brazil are major commodities-exporting countries....Large exchange rate movements
can have consequences
for economic growth, inflation, trade, and sovereign risk. Commodity-dependent
economies and developing
countries are most susceptible to this risk."
11. According to the excerpt, did currencies in Mexico and Brazil initially appreciate or depreciate due to the
COVID-19 pandemic? Explain your reasoning.
12. Assume that you saved $1000 US dollars to visit Cancún, Mexico. Would it have been better for you to convert
the money into Mexcian pesos in December of 2019 or April of 2020. Explain your reasoning
.
Imports, Exports, and Exchange Rates
Part 1: Key Terms-Match the concept with the letter that corresponds to the correct definition
1. Exports
2. Imports
3. Protectionism
4. World Trade
Organization
5. Exchange Rate
6. Appreciation
7. Depreciation
A. The value of one country's currency relative to the currency from a different
country
B. The practice of limiting the amount of trade and foreign goods to shield local
industries from foreign competition
C. The loss of value of a country's currency with respect to other foreign currencies
D. When individuals or businesses produce and sell goods or services in a different
country
E. When the value of a country's currency increases relative to the currency in a
foreign country
F. When individuals or businesses buy goods or services produced in a different
country
G. Establishes rules of trade between nations to ensure that trade flows as smoothly.
predictably and freely as possible
Part 2: Check Your Understanding- Complete the following
8. What is the difference between a trade surplus and a trade deficit?
9. Will a country's exports increase or decrease if their currency appreciates? Explain your reasoning.
10. Assume a Chinese businesswoman buys Telsa stock on the New York Stock Exchange. Would this be recorded in
the current account or the financial account for the United States? Explain your reasoning
.
Part 3: Article Analysis-Read the article excerpt and complete the following
"In March, the COVID-19 pandemic became more severe, affecting overall economies as well as exchange
rates. Reduced global demand for commodities such as oil has sent
commodities prices crashing: Mexico and
Brazil are major commodities-exporting countries....Large exchange rate movements
can have consequences
for economic growth, inflation, trade, and sovereign risk. Commodity-dependent
economies and developing
countries are most susceptible to this risk."
11. According to the excerpt, did currencies in Mexico and Brazil initially appreciate or depreciate due to the
COVID-19 pandemic? Explain your reasoning.
12. Assume that you saved $1000 US dollars to visit Cancún, Mexico. Would it have been better for you to convert
the money into Mexcian pesos in December of 2019 or April of 2020. Explain your reasoning
.
