These Economics W.I.R.E.D. activities recommend web links that relate to key concepts of each chapter of the textbook. The web links are accompanied by brief suggestions to the instructor regarding their use in the classroom and several discussion questions or exercises for assessing student learning. These activities also appear on the student web site without the notes to instructors.

Key Concepts: Capital Market Terminology, Markets for Physical Capital, Stock and Bond Markets, Risk versus Return, The Foreign Exchange Market

INO Exchanges (Global Foreign Exchange)

Click on the "Foreign Exchange" category in the left column navigation bar. Then, click on the EURUSD (Euro and U.S. Dollar) link. Under the graph, select either the 1-month or 6-month chart range option to feature the past EURUSD (Euro and U.S. dollar) exchange rate movements. Note that the Euro exchange rates are expressed in "US$ per Currency" terms.

Instructor: Discuss the current (e.g. spot rate) and past movements of EURO and USD exchange rates. Assess the current Japanese yen and U.S. dollar (USDJPY) exchange rates expressed in "currency per US$" terms. Highlight the volatility of a flexible exchange rate system and its potential influences on international trade.

• Calculate how much the U.S. dollar has appreciated or depreciated against the Euro over the last 6 months.
• Explain why a strengthening U.S. dollar might be good news for U.S. importers.
• Explain why U.S. automotive manufacturers are concerned about a potential weakening of the Japanese yen. How would this affect the U.S. "balance of trade"?