Week 14 · Readings & resources

Week 14 — Readings & Resources

Principles of Macroeconomics Free sample edition

Your primary reading is Chapter 14 (in this module). Everything below is the optional, go-deeper layer — pick what helps, skip the rest.

How to use this page

This page has 11 items (5 readings and 6 videos). Allow 63–77 minutes for everything. Each group points back to the matching chapter section and class-session segment, so use the full menu when you want more practice, or take the quick path below.

Every video here has captions: turn them on with the CC button in the player. The chapter covers the same ideas in text.

Pick-one quick path (18–20 min total)

① Which way did the dollar move, and who gains?

Chapter 14, Section “Tell appreciation from depreciation” · Session 1, Segment 2, “Appreciation versus depreciation” · Remember: a dollar that buys more foreign currency has appreciated, so exports get pricier abroad and imports get cheaper at home.

Imports, Exports, and Exchange Rates: Crash Course Economics #15 — CrashCourse — a fast, friendly episode on trade, trade deficits, and what a stronger or weaker currency does to the prices buyers face; each time the hosts name a currency move, say whether the dollar appreciated or depreciated and which way net exports go. This builds on Week 2's work with net exports, exports minus imports. (video, 10 min) (captions: creator)
Is a Strong Dollar Better than a Weak Dollar? — Federal Reserve Bank of St. Louis — a short essay that walks through who gains and who loses when a currency strengthens or weakens; as you read, sort each group it names into the side that gains from an appreciation and the side that gains from a depreciation. (reading, 6–9 min)
Appreciating Dollar Appreciation — Federal Reserve Bank of Richmond — a brief note on what a rising dollar does to the prices of imports and to foreign demand for U.S. goods; trace the export link and the import link in its argument, and treat its figures as one moment in time, not as numbers this course grades. (reading, 3–5 min)

② Who trades dollars, and what moves the rate?

Chapter 14, Section “Meet the foreign-exchange market” · Session 2, Segment 7, “The foreign-exchange market” · Remember: buyers of U.S. goods and assets demand dollars, U.S. buyers of foreign goods and assets supply them, and a floating rate settles where the two meet.

The Foreign Exchange Market- Macro 6.3 — Jacob Clifford — a quick sketch of the market for a currency, with the demanders and suppliers named; pause at each shift and say which crowd moved and whether the dollar appreciated or depreciated. (video, 5 min) (captions: automatic)
Floating and Fixed Exchange Rates- Macroeconomics — Jacob Clifford — a short contrast of a rate set by the market and a rate a government holds by buying and selling currency; check it against the chapter's one paragraph on each arrangement. Use it while completing the Week-14 module overview. (video, 3 min) (captions: automatic)

③ Where does a current-account deficit go?

Chapter 14, Section “Read the balance of payments: two accounts that mirror each other” · Session 2, Segment 9, “The balance of payments” · Remember: the current account and the financial account sum to zero, so a current-account deficit comes back as inflows of foreign investment.

Balance of Payments - Explanation — Economics Help A-Level — a short overview of the two accounts and why they must balance: the current account records trade in goods and services, investment income, and transfers, and when a country imports more than it exports, the foreign currency its trading partners earn comes back to buy its assets, such as government bonds, so a current-account deficit is matched by a financial-account surplus. It calls the mirror account the capital and financial account, which this course calls the financial account; the last part, on the causes of a current-account deficit, is optional. (video, 5 min) (captions: automatic)
What is the U.S. Current Account? — U.S. Bureau of Economic Analysis — the national accountants' own short explanation of what goes into the current account and why it works like an income statement for the whole economy; read it for the parts, and skip the dated figure. (reading, 2–4 min)
Balance of Payments - the Relationship between the Accounts — Jason Welker — a whiteboard walk through why a deficit on one account shows up as a surplus on the other; as you watch, restate each example as CA + FA = 0. (video, 6 min) (captions: automatic)
Balance of Payments - The Current Account — tutor2u — a revision talk on the parts of the current account, told with a British example; listen for the four parts and match each one to the chapter's definition. (video, 8 min) (captions: automatic)
Should We Worry about Trade Imbalances? — Federal Reserve Bank of Richmond — a short research brief on when a current-account deficit can be healthy, as when foreign savings flow into attractive investments, and when it can become a worry, as when borrowing from abroad pays for consumption and creditors begin to doubt repayment; list its reasons on each side and label which are positive claims and which are value judgments. It calls the mirror account the capital account, which this course folds into the financial account. Stop here before the full schools-of-thought debate; next week takes that up. (reading, 8–12 min)

Optional one-stop reference (free online reference)

Balance of Payments, Concise Encyclopedia of Economics — Econlib — an encyclopedia entry on how the accounts are kept and why total payments and receipts must match; read the opening, the accounting basics, and the section on the current and capital accounts, and skip the historical episodes and the data table. It leans toward the view that a deficit need not be harmful, so read it beside the chapter's two views. (reading, 7–10 min)

Heads-up (links rot): these point to outside sites that occasionally move or rename pages. If a link ever fails, tell your instructor and use the reference above in the meantime.

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