1. March 25/26 Announcements Due: 4/2/15
Macro bodies project
Vocab journal
Study Guide
Unit 5 notebook
Bring get well cards for Vineyard to the media center.
EQs
What drives international trade and determines specialization?
Why would China import a product it could make on its own?
SSEIN3
Warm-Ups
Define comparative advantage
Define absolute advantage
Agenda
Notes
Graded assignment

2. Exchange Rates
SSEIN3 The student will explain how changes in exchange rates can have an impact on the purchasing power of individuals in the United States and in other countries.
Define exchange rate as the price of one nation’s currency in terms of another nation’s currency.
Locate information on exchange rates.
Interpret exchange rate tables.
Explain why, when exchange rates change, some groups benefit and others lose.

3. Exchange Rate
The price of one nation’s currency expressed in terms of another nation’s currency.
i.e. $1 = €.727 (Euros)
1 Euro = $1.37
Exchange rate info found at:
Newspapers
Banks
Internet
Fixed rate: money is worth the same no regardless of economy
Floating rate: money value changes with the stock market

4. Exchange Rate Table How much does a U.S. dollar cost in yen?
They buy ours
(they’re visiting the U.S.)
We buy theirs
(We’re visiting their country)
British Pound
0.49
2.06
Danish krone
5.17
0.19
Euro
0.69
1.44
Japanese yen
114.69
0.0087
Mexican peso
10.71
0.093
Swiss franc
1.17
0.86
Thai baht
31.7
0.03
How much does a U.S. dollar cost in yen?
How many U.S. dollars does it take to purchase a Thai baht?
How many pounds would it take for a $10 meal in U.S.?
How many dollars does it take to buy a €15.00 train ticket?

5. International Indicators
Appreciation = when one country’s currency rises against another country
Depreciation = If one country’s currency falls against another country.
As demand for a country’s currency rises, so does the price of the currency.
Higher value = higher prices for international consumers

6. Appreciate/Depreciate

7. Who benefits? Strong dollar
American importers: can buy more internationally
Citizens travelling to other countries
Weak Dollar
American exporters: our stuff is cheaper
Foreigners buying our stuff, their $ goes further
Exports increase