How a domestic economy connects to the rest of the world. The balance of payments, how the foreign exchange market sets exchange rates, what makes a currency appreciate or depreciate, and how exchange rates affect net exports and capital flows.
Six ways to master Unit 6 — pick whichever fits how you like to study.
Six topics from the College Board CED, in order.
Unit 6 closes out AP Macroeconomics by opening up the model to the rest of the world. Every prior unit largely treated the domestic economy in isolation — Unit 6 adds in how countries trade goods and exchange currencies with each other. You'll learn how the balance of payments tracks a country's international transactions, how the foreign exchange market sets exchange rates through ordinary supply and demand, and how a stronger or weaker currency ripples through net exports, aggregate demand, and even back to interest rates and capital flows.
This unit is roughly 10–13% of the AP Macro exam and takes about 9–11 class periods. It's the smallest unit by weight, but it directly connects back to Unit 1 (comparative advantage and trade) and Unit 4 (interest rates and capital markets) — a strong grasp of those units makes Unit 6 come together quickly.
Three ideas anchor Unit 6 and recur across the whole course — this unit draws on the College Board's Markets (MKT), Macroeconomic Models (MOD), and Macroeconomic Policies (POL) Big Ideas: