We talked about purchasing power parity, the Big Mac index, how central banks can affect the exchange rates, pegging exchange rates and the current account deficit.

We went over exchange rates, who buys and sells foreign currency, and the difference between currency appreciation and depreciation. We also talked about supply and demand in foreign exchange markets. Purchasing power parity was covered.

We finished up monetary policy and went over how a central bank can effect an economy. We also examined the equation of exchange. We then started exchange rates.