MVI 0345

This is a very brief introduction to the foreign exchange markets that shows the supply and demand for dollars in this market, equilibrium, and shifts. It explains the terms, appreciation and depreciation and the effects of exchange rate changes on net exports. Finally it connects changes in net exports to changes in real GDP using a standard principles of economics aggregate supply/aggregate demand model. It does assume that the viewer knows a little supply and demand, and also has some familiarity with a basic AS/AD model. It is one link in a chain of relatively short macro principles videos.