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- Understand that an exchange rate is the price of a currency.
- Know the forces that operate on the demand side of the foreign exchange market.
- Know the forces that operate on the supply side of the foreign exchange market.
- Understand how supply and demand interact to determine the equilibrium exchange rate.
- Understand the essential aspects of balance-of-payments accounting.
- Be able to demonstrate graphically the forces that cause a currency to appreciate or depreciate.
- Understand why there is resistance to exchange-rate changes.
- Be able to describe several exchange-rate systems and their consequences.
- Understand the macroeconomic and microeconomic consequences of exchange-rate movements.
- Be able to describe a balance-of-payments problem.
- Be aware of the recent history of currency bailouts.

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