Introduction to Currency Economics [Head Start in A-Level Economics]

In this Head Start lesson we look at the economics of the currency market.

Quiz Time

Match the country to the currency with this Quizlet resource!

Introduction to currencies

An exchange rate is the price of one currency in terms of another – in other words, the purchasing power of one currency against another.

A currency depreciation means that one currency e.g. the £ buys less of another currency e.g. the US dollar or the Euro.

E.g. the pound falls from £1 buys Euro 1.30 to £1 buys Euro 1.10

What causes currency values to change?

In this short video we look at some of the factors that might cause a change in the external value of a country's exchange rate.