Currency Exchange - Revised

Learn about currency exchange, treasury bonds, trade imbalance, and the American-Chinese debt loop with this course.

Finances and Banking
Free Course
For most people, currency exchange is about buying foreign money for a vacation. But currency exchange is really about much more than that; it actually involves treasuries, bonds, imports and exports, trade imbalances, and the borrowing costs of a country. This course will give you a better understanding of currency exchange and its role in a country's growth and development. This is vital knowledge for any aspiring trader or economist.
  • Duration

    1-2 Hours
  • Assessment

  • Certification

  • Responsive

  • Publisher

    Khan Academy




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Currency exchange is, as the name implies, the exchange of one currency to another. It is also the value of one currency in relation to another currency. This course will introduce you to currency exchange how it works. You will study the treasury bond or T-bond which is a marketable, fixed-interest U.S. government debt security that has a maturity of more than 10 years. You will also learn about liquid assets.

You will then study the effect of currency on trade and look into the currency Chinese Yuan. You will learn that China buys the available excess U.S. dollars from the open market in the form of treasury bonds. This helps keep the US dollar inflated and the Yuan deflated. You will look at the rationale and effects of the American-Chinese debt loop, and learn how countries trade and lend money for development and growth.

Currency is a system of money in general use in a particular country. By the end of this course, you will learn how currency is valued, devalued, and how countries trade and lend money to each other. You will also learn the knock-on effects of a lack of demand for Treasury bonds to a country and the costs thereafter. So, check out this course and start learning more about the role currency exchange practices play in the financial system.

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Learning Outcomes

Having completed this course, you will be able to:

  • Outline how currency exchange how it works
  • Summarize what a trade imbalance is
  • List some of the advantages and disadvantages of a trade imbalance
  • Describe treasury bonds, liquid assets and their use in economics
  • Define the terminology used around currency exchange
  • Illustrate how countries trade and lend money to develop growth


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