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morning everybody this is a short video to explain about exchange rates what they are and also how you can illustrate a change in the exchange rate of a currency using a diagram so the first thing to know is the definition and an exchange rate is the price of one currency in terms of another youre always talking about the value of one currency against another currency the only way of measuring the value of one currency is in terms of another currency because that would allow you to buy other currency so for example you might be looking at the price of pounds in terms of Euros and as we know for anything when you want to work out the price of something you need to find out where the quantity demanded is equal to the quantity supplied and you can do that in a normal demand and supply diagram what the difference is here when youre enabling the AXI is normally P and Q price and quantity but here you need to make sure that youre writing for example the price of pounds in euros its not
