How Exchange Rates Work

● We explain topics simply. So Subscribe if you want to learn while being entertained.
✔ Please like the video and comment if you enjoyed – it helps a lot!
▶ If you want a question answered then ask in the comments and we may make a video about it!

About the video:

You may have traveled a lot and wondered why you get more of one currency when you exchange it for another. If so, you have witnessed exchange rates in action, but do you know how they work? Watch the video to find out what exchange rates are, how to convert between them and the different systems which determine a currencies exchange rate. Historically the gold standard system had been used, which fixed currency to a select value of gold, held in a vault. The three main systems are the floating, managed and fixed exchange rate systems. The floating system has minimal government intervention, using supply and demand to determine the exchange rate. The managed exchange rate is allowed to be within a permitted band and a fixed exchange rate is usually pegged to a currency with the interest of being competitive in the international market. The video explains this in more detail and with helpful picture to guide you through the subject.
Video Rating: / 5

What is a trade deficit? Well, it all has to do with imports and exports and, well, trade. This week Jacob and Adriene walk you through the basics of imports, exports, and exchange. So, you remember the specialization and trade thing, right? So, that leads to imports and exports. Economically, in the aggregate, this is usually a good thing. Globalization and free trade do tend to increase overall wealth. But not everybody wins.

Crash Course is on Patreon! You can support us directly by signing up at http://www.patreon.com/crashcourse

Thanks to the following Patrons for their generous monthly contributions that help keep Crash Course free for everyone forever:

Mark, Eric Kitchen, Jessica Wode, Jeffrey Thompson, Steve Marshall, Moritz Schmidt, Robert Kunz, Tim Curwick, Jason A Saslow, SR Foxley, Elliot Beter, Jacob Ash, Christian, Jan Schmid, Jirat, Christy Huddleston, Daniel Baulig, Chris Peters, Anna-Ester Volozh, Ian Dundore, Caleb Weeks

Want to find Crash Course elsewhere on the internet?
Facebook – http://www.facebook.com/YouTubeCrashCourse
Twitter – http://www.twitter.com/TheCrashCourse
Tumblr – http://thecrashcourse.tumblr.com
Support Crash Course on Patreon: http://patreon.com/crashcourse

CC Kids: http://www.youtube.com/crashcoursekids

How Exchange Rates Work

● We explain topics simply. So Subscribe if you want to learn while being entertained.
✔ Please like the video and comment if you enjoyed - it helps a lot!
▶ If you want a question answered then ask in the comments and we may make a video about it!

About the video:

You may have traveled a lot and wondered why you get more of one currency when you exchange it for another. If so, you have witnessed exchange rates in action, but do you know how they work? Watch the video to find out what exchange rates are, how to convert between them and the different systems which determine a currencies exchange rate. Historically the gold standard system had been used, which fixed currency to a select value of gold, held in a vault. The three main systems are the floating, managed and fixed exchange rate systems. The floating system has minimal government intervention, using supply and demand to determine the exchange rate. The managed exchange rate is allowed to be within a permitted band and a fixed exchange rate is usually pegged to a currency with the interest of being competitive in the international market. The video explains this in more detail and with helpful picture to guide you through the subject.

40 thoughts on “How Exchange Rates Work

  1. Станислава Орлова

    Without a doubt the utimate software to win forex is Forex Profiter. Just google "Forex Profiter V3.1" and buy it.

  2. Раиса Суханова

    Without a doubt the utimate software to succeed forex trading is Forex Profiter. Google and check "Forex Profiter V3.1".

  3. LtVax27

    Been trying to wrap my head around it, been looking at different values and how some countries are basically worthless (1.00 USD = 35256.79 IRR/22717.96 VND/20746.09 STD) How are these numbers even possible? Heard someone talking about a country that is worthless but is the highest exporter of oil in that region and it got me wondering.

  4. Diteo Ahmed

    As specialist, I'm sure Trabeplom System is good way to earn cash in the foreign exchange . Why don't you give it a chance? maybe it's going to work for you too.

  5. ahsanullah shanto

    Most of the forex traders are the victim of low regulated and low secure broker through it is really hard to justify a broker whether it is secure or not. As a secure broker I found Trade12 broker which uses several reputed bank accounts and use third party with a view to provide high security of funding.

  6. Elizabeth Barrilleaux

    Can you help someone holding Iraqi currency what they should be doing? I have no idea how to figure out what 200000.000 Dinar would be in USD. Think currency for idiots. my knowledge is just below that. Thank you & if possible, bless you!!

  7. Mr Economics

    why pay $80,000 when this knowledge is free? this is exactly why net neutrality i shappeneing , they are catching on and colleges are loosing money. you take away free knowledge and things go back to normal. thank you crash course

  8. Conner Fields

    You should do an episode on heterodox systems like Georgism, Distributionism, or the ever controversial Syndicalism.

  9. Mickey Breezy

    Hold on stop. NAFTA did NOT have a net positive for all three countries. That's a straight up lie. Right after they make such a claim, they explain exchange rate and really unintentionally make a case for why NAFTA hasn't worked. They also posit that China is a currency manipulator, which is true, but an unpopular thing to say.

  10. Victor Mcpherson

    What's up Folks, If you want to make money in foreign exchange. Just google "Forex Profiter V3.1".

  11. Amy Lorenzo

    You can save money by buying a 2bd hand TV or buying frozen fruit & vegetables. Even if you save money by buying a cheaper imported product, thy money is shipped out of the country rather than circling inside the country.

  12. Chiyaa Zeighem

    Hi I'm looking for potential buyer here in the USA to buy my seafood products coming from north africa

  13. Jesc Franco Fe

    No kidding the oil that the US buys from Venezuela no only sustain the the drug and launderer socialist totalitarian regime but keep the state and a part of the population in their side as clients that receive food, dollars etc at better cost the for those who don't…
    Is like the paradox of the hero where he himself is responsible for creating and sustaining the villain.

  14. djiniiiii

    Considering that we live in the digital age and Smartphones can be used as a good example to test the Free Trade theory, let us consider this:
    Apple IPhone, IPad etc are made in China but r also one of the most expensive products in their category. The only plausible explanation for this then is the fact that greed for ever more profits (10's of Billions) and not comparative advantage is what has lead to this situation.

  15. Pankhuri Tayal

    does a high exchange rate mean that the value of the currency has increased or does it mean that the value of the currency has decreased??

Comments are closed.