Unit 7: Foreign Exchange Market

• Foreign exchange market: the buying and selling of currency
• Appreciation: the value of the currency is strong. The Dollar buys more of another currency, which results in less expensive imports and more expensive exports 
• Imports increase because they are cheaper
• Creates a trade deficit
• Depreciation: a weak dollar. The dollar buys less of another currency, which results in more expensive imports and less expensive exports. 
• Cheap exports