AP Macro Unit 5 Summary

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3. Changes in Relative Price Level(Resulting in more imports)-Ex: US prices increase relative to Britain….U.S. demand for cheaper imports increases…U.S. demand for pounds increasesSupply of U.S. dollars increasesPound- appreciatesDollar- depreciates4. Changes in relative InterestRates-Ex: US has a higher interest rate than Britain.British people want to invest in USCapital Flow increase towards the USBritish demand for U.S. dollars increases…British supply more poundsPound-depreciates
PracticeFor each of the following examples, identify what willhappen to the value of US Dollars and Japanese Yen.1. American tourists increase visits to Japan.2. The US government significantly decreasespersonal income tax.3. Inflation in the Japan rises significantly fasterthan in the US.4. Japan has a large budget deficit that increasesJapanese interest rates.5. Japan places high tariffs on all US imports.6. The US suffers a larger recession.7. The US Federal Reserve sells bonds at highinterest rates.How do these scenarios affect exports and imports?
Page 1 and 2: Unit 5: InternationalTrade1
Page 3 and 4: “Magic of Markets”Brown Bag Act
Page 5 and 6: Absolute and ComparativeAdvantage5
Page 7: Per Unit Opportunity Cost ReviewRon
Page 10 and 11: Sugar (tons)Sugar (tons)S W0 301.5
Page 12 and 13: Sugar (tons)Sugar (tons)WheatSugarU
Page 14 and 15: Input Questions:IOU=Input: Other go
Page 16 and 17: PineapplesRadiosKenyaIndia30 10(1P
Page 18 and 19: Comparative Advantage PracticeCreat
Page 20 and 21: Closed vs. Open EconomiesA closed e
Page 22 and 23: Balance of TradeNet Exports (X N )
Page 24 and 25: Balance of Payments (BOP)Balance of
Page 26 and 27: Current AccountThe Current Account
Page 28 and 29: Current or Capital Account?Identify
Page 30: Practice1. U.S. income increases re
Page 33 and 34: Video: Down and Out Dollar
Page 35: The turnover in FOREX markets isalm
Page 38 and 39: What happens if you need more dolla
Page 40 and 41: S&D for the US DollarsPrice of USDo
Page 42 and 43: FOREX ShiftersLet’s use the examp
Page 46: PracticeFor each of the following e

AP Macro Unit 5 Summary

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