What is Exchange Rate : Explained with Animation

00:04:58
https://www.youtube.com/watch?v=PGm7wQIrxeg

摘要

TLDRThe video uses the scenario of purchasing chocolates from three different stores to explain the concept of currency exchange and the influence of demand on currency value. Each store has different price requirements that highlight how having the right denomination is crucial for making a purchase. A money exchanger sets up shop to help customers who need higher denomination notes. As demand for chocolates increases, so does the cost of the $100 note, illustrating how currency value fluctuates similarly to how the exchange rate behaves between countries like India and the USA.

心得

  • 🍫 Store 1 accepts $10 notes, allowing you to buy chocolates.
  • 💵 Store 2 requires $50, which you can provide with 5 $10 notes.
  • 🚫 Store 3 requires $100 notes that you cannot provide.
  • 💰 A money exchanger offers $100 notes in exchange for $10 notes.
  • 📈 The cost of the $100 note increases with higher demand.
  • 🌍 Exchange rates fluctuate based on demand for goods.
  • 📉 More demand for US products raises the USD value against INR.

时间轴

  • 00:00:00 - 00:04:58

    In this scenario, a person visits three different stores to buy chocolates with only $10 notes. Store one accepts $10 notes with a minimum cost of $10 per chocolate. Store two requires a minimum of $50, but the person can pay using five $10 notes. Store three, however, has a minimum chocolate cost of $100 and does not accept $10 notes, making it impossible to purchase from there. A money exchanger nearby offers $100 notes in exchange for $10 notes, but at a cost. This situation illustrates how the increased demand for a product affects the value of currency, similar to how the exchange rate operates between countries based on demand for goods.

思维导图

视频问答

  • What is the minimum cost of chocolates in each store?

    Store 1: $10, Store 2: $50, Store 3: $100.

  • How can you buy chocolates from Store 1?

    You can buy a chocolate from Store 1 using a $10 note.

  • Why can't you buy chocolates from Store 3?

    You can't buy chocolates from Store 3 because they only accept $100 notes, which you do not have.

  • What does the money exchanger do?

    The money exchanger offers $100 notes in exchange for $10 notes.

  • Why do you end up paying more despite the chocolate's price remaining constant?

    You pay more because the cost of obtaining the $100 note increases due to demand.

  • What is the exchange rate?

    The exchange rate is the increase or decrease in the value of a country's currency, influenced by demand for goods.

  • How does demand affect currency value?

    Higher demand for a country’s products leads to an increased value of its currency.

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  • 00:00:00
    [Music]
  • 00:00:09
    imagine you have gone to a market to buy
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    chocolates there are three stores in the
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    market store one store two and store
  • 00:00:19
    three let's make two assumptions
  • 00:00:21
    assumption one you only have $10 notes
  • 00:00:24
    assumption two each store had some
  • 00:00:27
    specific principles to sell their
  • 00:00:28
    chocolates
  • 00:00:30
    [Music]
  • 00:00:36
    rules of store one are minimum cost of a
  • 00:00:39
    chocolate is
  • 00:00:40
    [Music]
  • 00:00:41
    $10 and $10 notes are accepted in store
  • 00:00:48
    [Music]
  • 00:00:53
    one luckily you have $10 which are
  • 00:00:55
    acceptable in store one so it is
  • 00:00:58
    possible for you to buy a chocolate from
  • 00:01:01
    [Music]
  • 00:01:02
    store rules of store two are minimum
  • 00:01:05
    cost of a chocolate is $50 and $10 notes
  • 00:01:09
    are accepted in store
  • 00:01:15
    [Applause]
  • 00:01:17
    [Music]
  • 00:01:22
    too even though you don't have $50 notes
  • 00:01:25
    you have $510 notes so by giving these
  • 00:01:27
    $510 notes you can buy a chocolate from
  • 00:01:29
    store 2 rules of store three are minimum
  • 00:01:33
    cost of a chocolate is $100 minimum
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    acceptable denomination is $100 and $10
  • 00:01:39
    notes are not
  • 00:01:44
    [Music]
  • 00:01:49
    accepted you don't have $100 notes but
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    you have $10 $10 notes despite of having
  • 00:01:54
    $10 $10 notes you can't buy a chocolate
  • 00:01:57
    from store 3 because store 3 won't
  • 00:01:59
    accept
  • 00:02:00
    [Music]
  • 00:02:06
    so buying a chocolate from store 3 is
  • 00:02:08
    impossible for you what do you do
  • 00:02:13
    now well by observing all this A wise
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    man installed a money exchange cter near
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    store
  • 00:02:19
    [Music]
  • 00:02:21
    three he used $100 notes to his
  • 00:02:24
    customers by taking $10 notes from them
  • 00:02:27
    you may actually think that you can get
  • 00:02:28
    a $100 note by giving $10 $110 notes but
  • 00:02:31
    the money exchanger demands $ $10 notes
  • 00:02:33
    to give a $100 note in
  • 00:02:35
    [Music]
  • 00:02:40
    [Applause]
  • 00:02:40
    [Music]
  • 00:02:42
    return this is your only option because
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    you don't have $100
  • 00:02:46
    [Music]
  • 00:02:48
    notes you can't refuse the offer because
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    you need the chocolate from store
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    3 so you have to buy the $100 note
  • 00:02:58
    despite the extra cost
  • 00:03:00
    [Music]
  • 00:03:05
    observe that the cost of the chocolate
  • 00:03:07
    had not changed still you ended up
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    paying more than the original
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    amount what's the reason behind this
  • 00:03:17
    extra
  • 00:03:20
    [Music]
  • 00:03:23
    cost even though the cost of the
  • 00:03:25
    chocolate remain constant the cost of
  • 00:03:28
    $100 note has increased if the demand
  • 00:03:30
    for the chocolate of the store 3
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    increases the money exchanger will
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    proportionally increase the cost of the
  • 00:03:36
    $100
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    note because more number of people will
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    try to buy the $100
  • 00:03:42
    [Music]
  • 00:03:44
    note let's apply this concept to two
  • 00:03:46
    countries India and
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    USA let's compare all the character to
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    make this conversation sound more
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    meaningful
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    [Music]
  • 00:04:06
    whenever the demand for the chocolates
  • 00:04:07
    of the store 3 increases the value of
  • 00:04:10
    the $100 note
  • 00:04:12
    increases similarly whenever the demand
  • 00:04:15
    for the US products increases the value
  • 00:04:17
    of the US dollar increases which means
  • 00:04:20
    that more INR is to be given in exchange
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    of
  • 00:04:23
    [Music]
  • 00:04:25
    USD this increase or decrease in the
  • 00:04:28
    value of the country's currency
  • 00:04:29
    depending on the demand of the goods and
  • 00:04:31
    other factors is called the exchange
  • 00:04:34
    rate more the demand of a country's
  • 00:04:37
    products more is the value of the
  • 00:04:39
    country's currency
  • 00:04:47
    [Music]
标签
  • currency exchange
  • chocolate store
  • currency denominations
  • money exchanger
  • economic concepts
  • demand and supply
  • exchange rates
  • international currency
  • US dollar
  • India currency