10–13% of the AP exam. Key topics: Balance of payments: current account vs. capital/financial account; balance of payments identity, Foreign exchange (forex) markets: exchange rate determination, currency appreciation and depreciation, Currency changes and effects on net exports, aggregate demand, and the domestic economy, International capital flows and interest rate parity connections, Trade deficits and surpluses; savings-investment identity (S − I = NX), How domestic monetary and fiscal policy changes transmit through forex and NX to AD.
Study guide content for this unit is being prepared. Check back soon for complete lesson notes, formula sheets, and worked examples.
