AP®︎ Macroeconomics: Topic 6.5 Flashcards

Master key terms and definitions for Topic 6.5 of AP Macroeconomics – Changes in the Foreign Exchange Market and Net Exports to help you prep for quizzes and the AP exam.

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Term

Exchange Rate Changes and Aggregate Demand

Definition

Higher net exports shift aggregate demand right; lower net exports shift aggregate demand left.

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Exchange Rate Changes and Aggregate Demand
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Higher net exports shift aggregate demand right; lower net exports shift aggregate demand left.

MKT-5.F
Currency Appreciation Effects
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A stronger currency reduces exports, increases imports, and lowers net exports.

MKT-5.FMKT-5.F.1
Currency Depreciation Effects
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A weaker currency increases exports, decreases imports, and raises net exports.

MKT-5.FMKT-5.F.2
Net Exports and Aggregate Demand
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Higher net exports increase aggregate demand, while lower net exports decrease aggregate demand.

MKT-5.F
Foreign Exchange Market Shifts and Currency Value
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Higher currency demand or lower supply causes appreciation; lower demand or higher supply causes depreciation.

MKT-5.F