Exchange Rates and Trade

The video tutorial explains the concept of exchange rates and their impact on international trade. It covers how currency appreciation and depreciation affect trade, the role of the foreign exchange market, and the differences between fixed and flexible exchange rate systems. The tutorial also discusses the importance of maintaining a trade balance and strategies for managing currency values to support economic stability.

What is the term used when a currency's value increases compared to another currency?

• Appreciation

• Inflation

• Deflation

• Depreciation

What is the foreign exchange market primarily composed of?

• Banks and financial institutions

• Online platforms

• Retail stores

• Government agencies

What was the main goal of the Bretton Woods Conference?

• To promote digital currencies

• To eliminate trade barriers

• To create economic stability post World War Two

• To establish a single global currency

What is a trade surplus?

• When a country exports more than it imports

• When a country's currency depreciates

• When a country imports more than it exports

• When a country's currency appreciates

How can a government address a trade deficit?

• By reducing exports

• By increasing imports

• By depreciating its currency

• By increasing the exchange rate