Our Semester in AP Macro

Macroeconomics was probably one of the most interesting classes to have taken this semester, if not in all of high school so far.  It was definitely challenging with so much content and only a semester to not only learn, but master it, but somehow here we are today, still alive.

Knowing how the economy functions, as well as the importance of trade between countries is arguably the most important part of the class because it is likely the only part of economics that is guaranteed to not only affect someone, but also a part of economics that they can actually interact with.  While other topics like fiscal and monetary policies, as well as aggregate supply/demand and RGDP are important to understand, there's not really much you can do about them; understanding how and why they work makes it easier to understand the actions of the government officials, but more likely than not, you're not going to be able to do anything about it, unless you're going into a field that actually handles those things.

But it's far more likely that you'll take a trip outside of the US, or that you'll be buying things from different countries, and it's important to know not only the concepts of such things, but also how you can make the most out of that knowledge, whether it be making good travel decisions, or buying something from one country instead of another, and so on.

There are lots of different currencies in the world today.

Some of the important topics that go along with trade are exchange rates.  You can't buy goods at a store in a foreign country with American dollars, instead you have to use the country's local currency, and in order to do that, you must essentially buy their currency with yours.  However, because not all economies are the same, different currencies have different values of worth; one US dollar isn't going to be worth the exact same as one euro.  By knowing exchange rates, you can make good decisions about where to travel if you're somewhat tight on vacation money, or at the very least, know how much you're really going to be spending in a different country.

Trade let's you make the most of your resources.

It's probably safe to assume that not everything you own is from the US.  In fact, the things that were made in the US might actually be in the minority of things you own.  Trade is important because it lets countries make the best use of their scarce resources, and then trade those goods for other basic necessities and luxuries that another country is either better at making, or sacrifices less for making it.  The US wouldn't be able to export as many goods if they had to also provide clothing, utensils, and a wide variety of foods for the entire country.  That's where trade comes in.  But what's important for us individuals to know about trade is that goods that have less of an opportunity and production cost to create also mean cheaper prices at the store.  So knowing where you're getting some of your goods can be vital to making sure you're getting the best deal available.

A quick video about Russia potentially opening up to world trade
And a news report about the state of oil trades (from a year ago)