Im revisting this playlist to review the exchange rate stuff I learnt in IB nd Ive gotta say its just as succint and helpful as before. Im still very thankful for that 6 I got from watching your videos!
@@pwrsurf3431 I was class of 2018 :D 4 years later Dal's stuff is still super useful, and it got me a 6 in my finals for Econ HL!! I still come to this channel for good summaries hahaha
How do I decide which diagram to use in an exam? One shows increase in output and the other shows a decrease. Or do I draw both of them and explain that it'll depend on whether the particular country is more reliant on exports(keynesian) or imports (classical)?
Slight Query: Suppose a country has a currency A -If As are sold in return for other currencies, the SUPPLY for As INCREASES -if we do exactly the opposite, i.e. buy As, the DEMAND for As INCREASES My question is; is a rise in demand always accompanied by a subsequent fall in the supply of As? Similarly, is the fall of supply of As always accompanied by a rise in the demand of As?
I understand the general concepts but am a little confused with overall effect of changes in price level and changes in consumer taste. If we have two countries (A and B) and the price level in country A falls, leading to increase in demand for currency A, leading to an appreciation in currency A, I understand this causes net exports and AD to fall - but what about the effects of the initial price level fall? Won't these still have the effect of boosting exports? Could the boost in exports from lower price level outweigh the exchange rate appreciation effects? Similarly for changes in consumer taste, if consumer taste shifts towards country A goods/services, I understand this causes appreciation and NX/AD fall - but won't the shift in taste towards country A goods/services cause exports to increase? Ie what is the overall effect on AD? The price level falling and consumer tastes shifting towards a country's goods and services indicates to me that NX and AD would increase (before consideration of exchange rate effects). If asked in an essay, is it best to explain what happens to E.R but say the overall effect on AD is uncertain?
yes if foregin counties are buying more UK exports, that's an injection into the circular flow which may then lead to increased consumers ( depends on mpc, and marshal lerner condition.) which then may lead to a greater increase in GDP. For investment If inflation is increasing firms are gaining increased retained profts as consumers may still choose to buy imported goods. This means firms may choose to invest there retaied profits into infrastructure, R+D, Ai wich then may cause the accelerator effect
@@animehub1611 Cramming for assessments init? I'm doing all nighters nowadays, binge watching this guy. I've learnt more in a few days from him than I have from my teachers since 2019, binge watching works.
foir depreciaito the inflaton that is cuased depends whewre the ifnaltiuon is taking placew. it coulx occur in the FLAT Prtof lras- THEREOFE NO inflaiton - therefore beneifs.
taught me the way my econ teacher should have. you're a hero my dude
W Mans, day before my macro exam thanks bro
Dal i am just letting you know you are a living legend 🐢
Im revisting this playlist to review the exchange rate stuff I learnt in IB nd Ive gotta say its just as succint and helpful as before. Im still very thankful for that 6 I got from watching your videos!
Revising for IB Economics as well? Me too
@@pwrsurf3431 I was class of 2018 :D 4 years later Dal's stuff is still super useful, and it got me a 6 in my finals for Econ HL!! I still come to this channel for good summaries hahaha
Really like your excitement, way to go !
Such a helpful video!!!!! Done very well. Thank you so much sir!
Would you draw lower ad and increase in sras on the same diagram?
You are the best, Thank you.
Thank you sooooo much!!!
I hope you are my ib teacher
when evaluating the effect on ad could you say ad may not rise/fall because of other factors like gov spending
Thank you very much! Just a question--can this be used for devaluation for fixed exchange rates as well?
+Charlene Chau Yes absolutely. The concept is exactly the same, just a different exchange rate regime
i love you man
Have you done a video on terms of trade?
How do I decide which diagram to use in an exam? One shows increase in output and the other shows a decrease. Or do I draw both of them and explain that it'll depend on whether the particular country is more reliant on exports(keynesian) or imports (classical)?
+Shariq Farooqui draw both, only the long term is considered when talking about growth.
Slight Query:
Suppose a country has a currency A
-If As are sold in return for other currencies, the SUPPLY for As INCREASES
-if we do exactly the opposite, i.e. buy As, the DEMAND for As INCREASES
My question is; is a rise in demand always accompanied by a subsequent fall in the supply of As? Similarly, is the fall of supply of As always accompanied by a rise in the demand of As?
Yes, because there is a limited amount of currency.
can evaluaiton be if the governmenrt wants TO INTRODUCE PROTECTINIST MEASURES?
What would the effect of exchange rates be on Foreign Direct Investment?
higher ER increases the price of £ for foreign firms looking to invest into the UK, making FDI more expensive n lowering incentive- in theory
you're my hero
Amazing!
I understand the general concepts but am a little confused with overall effect of changes in price level and changes in consumer taste.
If we have two countries (A and B) and the price level in country A falls, leading to increase in demand for currency A, leading to an appreciation in currency A, I understand this causes net exports and AD to fall - but what about the effects of the initial price level fall? Won't these still have the effect of boosting exports? Could the boost in exports from lower price level outweigh the exchange rate appreciation effects?
Similarly for changes in consumer taste, if consumer taste shifts towards country A goods/services, I understand this causes appreciation and NX/AD fall - but won't the shift in taste towards country A goods/services cause exports to increase?
Ie what is the overall effect on AD? The price level falling and consumer tastes shifting towards a country's goods and services indicates to me that NX and AD would increase (before consideration of exchange rate effects). If asked in an essay, is it best to explain what happens to E.R but say the overall effect on AD is uncertain?
multiplier and accereratyor effet can be included as well or not?
yes if foregin counties are buying more UK exports, that's an injection into the circular flow which may then lead to increased consumers ( depends on mpc, and marshal lerner condition.) which then may lead to a greater increase in GDP.
For investment If inflation is increasing firms are gaining increased retained profts as consumers may still choose to buy imported goods. This means firms may choose to invest there retaied profits into infrastructure, R+D, Ai wich then may cause the accelerator effect
Can we not use just one diagram to show LRAS shift to left? (keynes)
Why lol?
@@animehub1611 Cramming for assessments init? I'm doing all nighters nowadays, binge watching this guy. I've learnt more in a few days from him than I have from my teachers since 2019, binge watching works.
Because it is a fall in SRAS, not LRAS.
isnt demand pull inflation bad as it is anticipated
Because the potential output is still higher which is good for an economy
foir depreciaito the inflaton that is cuased depends whewre the ifnaltiuon is taking placew. it coulx occur in the FLAT Prtof lras- THEREOFE NO inflaiton - therefore beneifs.
W