The Foreign Exchange Market- Macro 6.3

Clifford from ACDC Econ explains key concepts of foreign exchange, focusing on supply and demand for US and Canadian dollars. He discusses how exchange rates are determined and the roles of different countries in demanding and supplying currencies. The video also covers four shifters of foreign exchange: tastes and preferences, price level, income, and interest rates, with a focus on how interest rates affect currency appreciation and depreciation.

What is the relationship between supply and demand in determining the exchange rate?

Who is demanding US dollars in the foreign exchange market?

Explain the four shifters of foreign exchange.

What happens to the demand for American dollars when Canadian interest rates are lower?

How does an increase in US interest rates affect the Canadian dollar?