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An exchange rate is the price of one currency in terms of another. Currency appreciation means the currency becomes more valuable (fewer units needed to buy foreign currency). Currency depreciation means the currency becomes less valuable (more units needed to buy foreign currency).
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Practice Questions: Test Your Understanding
Apply what you've learned with these practice questions. These questions test your understanding of the key concepts.
Question 1 of 3
Suppose the exchange rate between the U.S. Dollar (USD) and the Thai Baht (THB) is $1 = 35 THB. A handmade scarf costs 700 THB in Bangkok. How much would the scarf cost in U.S. dollars?
$10
$20
$35
$70
$24,500
Key Takeaways
- 📊Master the fundamentals: Understanding these core concepts is essential for success in AP Economics.
- ✅Practice makes perfect: Use the interactive exercises and practice questions to reinforce your understanding.